PHILIPPINES: China Bank Reports 6% Rise in Q1 Income

China Bank

Strong growth in lending and core fee-based income supported China Banking Corporation’s (PSE:CHIB) income in the first three months of this year, the bank said in a disclosure to the Philippine Stock Exchange.

China Bank posted a 6% growth in net income to P1.47 billion (US$29 million) in the first three months of 2017. Operating income reached P5.66 billion, up 7% compared to same period last year.

Net interest income rose 14% to P4.47 billion, driven by the 16% growth in gross loan portfolio.

Non-interest income (excluding trading gains) grew by 22% to P1.08 billion from the gain in service charges, fees from bancassurance, investment banking and trust, as well as income from asset sales.

Core recurring income (operating income excluding trading gains) was up 15% to P5.55 billion from P4.80 billion in the first quarter of 2016.

Operating expenses growth was limited to 8% to P3.88 billion even with the continued expansion in its branch and distribution network and investments in people and technology to support the growth of new businesses.

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Cost to income ratio was at 66.37% versus 66.15% recorded in the first quarter of 2016. ROE and ROA were at 9.15% and 0.93%, respectively.

Total assets stood at P620.40 billion, up 14% or P77.33 billion above Q1 2016 levels.

The growth was driven mainly by the 16% growth in Gross loan portfolio to P378.41 billion. Robust growth was registered across all market segments: consumer, commercial and corporate.

Total securities grew by 42% to P101.08 billion, with Held-to-maturity securities, which increased by 176% to P63.01 billion, accounted for the significant increase in the Bank’s investment portfolio.

Total deposits grew 17% to P530.52 billion, supported by 21% growth in low-cost CASA deposits to P272.58 billion, reflecting the strength of the China Bank franchise boosted by deposit growth from new branches.

CASA ratio improved to 51.4%, while loans-to-deposit ratio stood at 70%. Total capital funds reached P64.91 billion up 5% from the same period last year.

“Our strategic focus to strengthen our core businesses and diversifying our fee-based
revenues in the midst of our network expansion are starting to produce encouraging results.” said China Bank President and CEO Ricardo R. Chua.

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“We marked significant milestones in 2016: our investment banking arm China Bank Capital Corporation completing its maiden year of operations as market leader in retail bond issues, our thrift bank China Bank Savings turning around to full profitability, and significant growth achieved in all other major market segments.” –