Chinabank posts higher earnings

CHINA Banking Corp. (Chinabank) saw its net income rise by 6% year on year to a record P11.4 billion in the first half on the strength of its core businesses, it said on Thursday.

“Our business performance continued to improve during the first half of the year,” Chinabank President & Chief Executive Officer Romeo D. Uyan, Jr. said in a stock exchange disclosure.

“The continued growth of our core lending and deposit-taking businesses, combined with stable asset credit quality and controlled operating costs, allowed us to register our highest first-half net income to date, solidifying our position as one of the top four banks in the country,” he added.

The bank’s financial statement was unavailable as of press time.

Chinabank’s first-half performance translated to a return on equity of 15.1% and a return on assets of 1.5%.

Its net interest income rose by 19% year on year to P30.4 billion at end-June amid elevated rates, with higher earnings from better loan volume helping offset the increase in interest expense.

Net interest margin was at 4.4%, improving by 25 basis points from the previous year.

Meanwhile, operating expenses increased by 5% to P14.1 billion due to higher volume-related taxes.

Its cost-to-income ratio stood at 49%.

Chinabank’s gross loans rose by 10% year on year to P817 billion as of June on strong demand across market segments, with consumer loans growing by 25% and making up a quarter of its loan book in the period.

Despite the increase in loans, its asset quality remained good as its nonperforming loan (NPL) ratio stood at just 1.9%. NPL coverage was at 141% even as it set aside lower credit provisions of P737 million.

On the funding side, deposits grew by 145% to P1.3 trillion.

Chinabank’s assets stood at P1.5 trillion at end-June, up by 12% year on year.

Total capital was at P152 billion, also rising by 10%. Its common equity Tier 1 ratio was at 14.5% and its total capital adequacy ratio stood at 15.3%.

“This solid financial performance, backed by strong capital and liquidity, reflects CBC’s inherent financial strength, prudent risk management, and sharpened customer focus,” Chinabank Chief Finance Officer Patrick D. Cheng said.

The listed lender has 648 branches and 1,078 automated teller machines (ATM) to date, including the 168 branches and 210 ATMs of Chinabank Savings, Inc.

Chinabank’s shares rose by 40 centavos or 1% to end at P40.40 apiece on Thursday. — A.M.C. Sy