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China Bank posted 23% income growth to P8.2b in 9 months

China Banking Corp. said Thursday net income climbed 23 percent in the first nine months to P8.2 billion from the same period last year on sustained growth of core businesses.

The profit translated into an improved return on equity of 11.15 percent.

China Bank said net earnings reached P3 billion in the third quarter, up 21 percent from a year ago.

“As the global pandemic continues, China Bank sustained the growth of its core businesses. Loans and deposits rose by 6 percent year-on-year to P595 billion and P827 billion, respectively, for a loans-to-deposit ratio of 72 percent,” the bank said.

Total assets increased P60 billion to P1 trillion, ahead of the bank’s year-end target. Return on assets improved to 1.11 percent.

“The year 2020 has been very challenging, but with the hard work and commitment of our employees, we are able to pull through and provide the needed banking services and support to our clients,” said China Bank president William Whang.

“We are still expecting continuing challenges from a difficult environment, and the results give us the buffer to absorb further stresses down the road,” Whang said.

Net interest income in the nine-month period jumped by 35 percent to P25 billion mainly from the 36-percent drop in interest expense.

This led to a higher net interest margin of 3.89 percent. Fee-based income increased by 35 percent to P7 billion as trading gains surged 3.6 times and income from its trust business grew by 15 percent.

Operating income without trading gains reached P28 billion, up 24 percent year-on-year. Operating expenses grew by 6 percent to P16 billion, mainly from pandemic- and volume-related costs. The cost-to-income ratio improved to 51 percent from 65 percent.

The bank said it continued to work with borrowers experiencing financial difficulty under the circumstances. With the expected impact of the pandemic and lockdown measures on asset quality, the bank increased its provisions for probable credit losses to P6.3 billion, or 12 times bigger than last year. Non-performing performing loan ratio settled at 2.5 percent in September, while NPL cover for the period remained sufficient at 104 percent.

Topics: China Banking Corp. , net income
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