East West Banking Corp. said Monday net income in the first half doubled to P3.3 billion year-on-year, led by sustained momentum from its lending portfolio.
EastWest president Jackie Fernandez said in a statement the bank’s intensified initiatives on consumer lending portfolio that started last year were now showing results.
“While we have surpassed our pre-pandemic peak loan levels this quarter, the work is not complete as we focus on optimizing our balance sheet structure to unlock more value,” Fernandez said.
Net revenues rose 29 percent to P16.3 billion on 18-percent rise in net interest income to P13.0 billion as the consumer lending expansion pushed its core earning capacity back to pre-pandemic levels.
The consumer lending portfolio, which accounts for 77 percent of total loans, grew by 27 percent led by credit cards, auto and key salary loan segments.
Meanwhile, interest expense grew by P1.9 billion as the current interest rate environment translated into higher funding costs. With its asset structure, net interest margin ended at 7.5 percent, improving by 77 basis points from last year, the highest in the industry.
Accompanying this solid performance were higher non-interest income which doubled to P3.3 billion. Fees and commissions surged by 70 percent to P2.3 billion as banking transactions improved while securities and foreign exchange trading also contributed to revenue growth this year, posting a P403 million income.
Operating expenses grew 16 percent to P9.5 billion, driven largely by manpower, IT and business-related expenses. The bank continues to spend on people-focused programs as it prepares for its growth initiatives.
Total assets rose 4.6 percent to P434 billion, while total loans and receivables grew by 22 percent or P49.8 billion to P273.6 billion as the bank deployed its excess liquidity towards higher-yielding consumer loans.
Total deposits was flat at P335.1 billion, but CASA deposits grew by 6.9 percent to P272.4 billion, beating industry growth trends. CASA ratio improved to 80 percent.
Capital ratios continue to stand at a healthy 14 percent and 13.2 percent for capital adequacy ratio and common equity tier 1 ratio, respectively, above the regulatory requirements.