China Banking Corp., the sixth-largest lender in terms of assets, said Thursday net income jumped 24 percent in the first half to P5.2 billion from a year ago, despite the higher provisions it made for delinquent loans.
The bank said in a statement it continued the strong performance amid the community quarantine since March this year. The first-semester number translated into a return on equity of 10.64 percent and a return on assets of 1.07 percent.
“Our first-half results reflect China Bank’s continued strength and resilience, and demonstrate the soundness of our strategies to thrive in the new normal. I am very grateful to our employees for their dedication and flexibility and to our customers for their continued trust and patronage,” China Bank president William Whang said.
“The year 2020 will go down in China Bank’s history, not just for our centennial anniversary, but for our resolve to make the best out of a very difficult situation, keeping in mind the safety and welfare of
our stakeholders,” he said.
The bank ramped up provisions more than 14 times to P4.8 billion in anticipation of the impact of COVID-19 and ongoing quarantine measures on asset quality.
Total operating income climbed 40 percent year-on-year to P21.0 billion. Net interest income grew 39 percent to P16.2 billion on the back of higher volume of earning assets and lower funding costs as market interest rates declined.
Net interest margin improved to 3.8 percent from 3.2 percent.
Meanwhile, non-interest income surged 41 percent to P4.7 billion primarily from strong trading and securities gains, which grew 212 percent to P2.8 billion. Julito G. Rada
Operating expenses increased 5 percent to P10.4 billion. Cost-to-income ratio improved to 50 percent from 66 percent in the same period last year.
“Our balance sheet reflects ample liquidity and sufficient capitalization. We are closely monitoring developments and working with our customers who are under financial distress in these difficult times. While the long-term impact of the global pandemic on the Philippine economy and banking industry remains uncertain, we are confident that China Bank’s enduring financial strength will enable us to navigate the new or even the next normal,” said China Bank chief finance officer Patrick Cheng said.
Total assets grew 8 percent to P982 billion as loan portfolio expanded 11 percent to P593 billion.
Asset quality remained healthy amid the loan growth, with a non-performing loan ratio of 1.6 percent and NPL cover of 146 percent.
Total deposits grew 3 percent to P773 billion with CASA at 53 percent. Total capital stood at P98 billion, up 8 percent year-on-year.
“In these uncertain times, we remain cautiously optimistic. We are adapting our strategies accordingly and managing our capital with the prudence that the current volatility calls for. I am convinced that
we could overcome the difficulties, and like in the last 100 years, we would do so by standing by our customers, cooperating with regulators, and doing our part to fight this pandemic and emerge stronger together,” said Whang.