Philippine-listed diversified conglomerate Filinvest Development Corp (FDC) disclosed that its net income in the first three months of this year grew by 8 per cent to P3 billion (US$60 million) from P2.8 billion in the same quarter last year.

In a disclosure to the Philippine Stock Exchange, the Gotianum family-led FDC also added that its consolidated net income was recorded at P4 billion, up 5 per cent from the same period last year.

The company said it managed to post a respectable net income growth amidst the COVID-19 pandemic due to the strong performance of its banking subsidiary, EastWest Bank, as well as cost control measures implemented across the group.

Total revenues slightly declined by 2 percent but it was more than offset by a 27 percent drop in costs. Meanwhile, operating expenses increased by 27 percent largely due to provisions for losses made by EastWest Bank in anticipation of the economic fallout resulting from the effects of COVID-19.

“Beyond financial and scenario planning, FDC and its subsidiaries answered the pandemic with clear protocols to safeguard the health and safety of the Filinvest family. We responded quickly to address our customers’ needs and provided financial relief such as rental waivers, deferment or loan term extensions during the ECQ period. These have impacted on our results for the first quarter,” said FDC President and CEO L. Josephine G. Yap.

EastWest Bank delivered a net income contribution to the group of P2.3 billion in the first quarter of 2020, 75 percent higher than the same period last year, driven by better margins from its core lending and deposit-taking businesses, and higher trading gains.

On a standalone basis, EastWest’s net interest income, which accounts for 69 percent of revenues, increased by 42 percent to P6.6 billion. This was on the back of a net interest margin (NIM) improvement by 173 bps from year-ago level to 8.1 percent as market liquidity and deposit rates normalized.

Non-interest income increased by 52 percent to P2.9 billion, mainly due to securities trading gains. On the other hand, operating expenses, excluding provisions for losses, increased by 14 percent to P4.6 billion from higher compensation costs. Its cost-to-income ratio improved to 48 percent from last year’s 60 percent.

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The imposition of the ECQ had immediate effects on FDC’s real estate business composed of listed subsidiary, Filinvest Land, Inc. (FLI), and Filinvest Alabang, Inc. (FAI).

Sale of lots, condominium, and residential units declined by 40 percent to P3.4 billion in the first quarter of 2020 while net income contribution to the group fell by 26 percent to P1.5 billion.

This was largely due to the lower sales take-up in 2019 and delays in the completion of projects brought about by the construction halt in mid-March.

A grace period for the payment of its homebuyers was likewise granted during the ECQ period which affected real estate sales recognition. Meanwhile, rental revenues from FLI as well as FAI was flat at P1.9 billion in the first quarter of 2020. –