Chinabank Profit Jumps 11% to P14.5 Billion in H1

MANILA, Philippines — China Banking Corp. (Chinabank) booked an 11-percent increase in net income in the first half as robust lending activity, a wider interest margin and continued balance sheet expansion strengthened its core banking operations. The Sy-led bank said earnings reached P14.5 billion from about P13 billion in the same period last year. This translated to a return on equity of 15.1 percent and a return on assets of 1.6 percent, which the bank said remained among the highest in the industry. Net interest income climbed by 14 percent to P39.7 billion. The increase came as Chinabank’s net interest margin widened to 4.67 percent. Operating expenses rose by 11 percent to P18.4 billion as the bank continued to spend on initiatives supporting business expansion and revenue growth. Despite the higher expenditures, its cost-to-income ratio stood at 50 percent. Asset quality remained stable, with the bank’s non-performing loan (NPL) ratio holding at 1.5 percent. Chinabank set aside P1.2 billion for impairment and credit losses during the six-month period. Its NPL coverage ratio settled at 106 percent. The bank’s balance sheet continued to expand, with total assets growing by 13 percent year on year to P1.9 trillion. Chinabank said this kept it as “the fourth largest among the private universal banks in the country.” Gross loans surged by 17 percent to P1.1 trillion amid “strong demand across corporate and consumer segments,” faster than the growth in the bank’s deposit base. Total deposits increased by 14 percent to P1.5 trillion, supported by a 21-percent rise in low-cost peso checking and savings accounts. Including foreign currency deposits, total current and savings accounts reached P750 billion. This resulted in a CASA ratio of 49 percent, helping the bank manage its overall cost of funding amid elevated interest rates. Chinabank maintained a capital adequacy ratio of 15.6 percent and a common equity tier 1 ratio of 14.7 percent, both above the minimum regulatory requirements. Chinabank operates a consolidated network of 673 branches and 1,150 automated teller machines. Its subsidiaries include China Bank Savings, Chinabank Capital, Chinabank Securities and Chinabank Insurance Brokers. Separately, Chinabank announced several management changes following meetings of its executive committee and board of directors. Marisol Teodoro will retire as first vice president I effective Sept. 1. Her secondment to Chinabank Securities Corp. as director, president and CEO will be recalled effective Aug. 17. Teodoro will serve as an adviser to the brokerage subsidiary from Aug. 17 to 31 before her retirement. Chinabank Securities appointed Ronald Emmanuel Co as president and director effective Aug. 17. Co, 45, has more than 15 years of experience in the brokerage industry, primarily overseeing operations at BDO Securities Corp. and First Metro Securities Brokerage Corp.