China Banking Corp. (China Bank) reported net income in the first semester rising 14 percent higher to P2.51 billion from only P2.20 billion last year, driven by the strong growth in core businesses.
China Bank Senior Vice President and Investor and Corporate Relations Group Head Alexander C. Escucha said the increase in loans, better net interest margins (NIM) and higher fee-based revenues all made significant contributions to the bank’s bottomline.
The P2.51-billion profit, translates to a return on equity of 8.67 percent and a return on assets of 1.06 percent.
The bank’s net interest income increased by 9 percent to P7.42 billion on the back of higher loan volume and lower interest expense, which dropped 9 percent to P2.06 billion. This resulted in an improved NIM of 3.36 percent for the first six months.
Noninterest income rose 4 percent to P2.05 billion, mainly coming from higher trading gains and fees and commissions.
Net loans expanded 10 percent year-on-year to P289.32 billion, underpinned by a 26-percent increase in consumer loans.
Total deposits stood at P399.45 billion. As deposit growth remained steady at 3 percent, the bank’s Casa (checking and savings accounts) level rose 14 percent to P202.50 billion and replaced a significant block of high cost funding, thus improving the funding mix and reducing interest expense by P210 million.
The Casa to total deposits ratio stood at 50.70 percent versus 45.63 percent year-on-year, while the loans to deposit ratio was at 72.43 percent from 68.11 percent. Total assets increased 5 percent year-on-year to P479.29 billion. Total capital funds rose 6 percent to P58.81 billion as of June 2015.