China Banking Corp. (China Bank) reported double-digit net profits generated, mainly from its core and fee-based businesses.
In a regulatory filing, the lender reported P5.7-billion net income in the January-to-September period this year, up 17 percent from last year.
It attributed the stronger-than-expected growth to higher net interest revenues of 16 percent to P14.26 billion, as well as to the 17-percent growth in noninterest income to P4.9 billion. China Bank grew its noninterest income despite the P611.43-million drop in trading gains.
Its core operating income excluding trading gains and nonrecurring income grew 19 percent compared to last year. This reflected continued robust growth in service charges, fees from investment banking and trust, as well as income from asset sales, the bank said.
“China Bank continues to deliver positive results on the back of strong growth in our core banking businesses. The better-than-expected results reflect the fruits of our significant strategic initiatives since we began our expansion phase 10 years ago with the Manila Bank acquisition.” China Bank President William Whang said.
Whang took the helm on November 1.
China Bank’s performance translated to a 10.41-percent return on equity and a 1.16 percent return on assets on consolidated basis.
Its loan portfolio grew by 25 percent to P434.81 billion as consumer loans grew 28 percent even as the corporate segment expanded by 32 percent on strong demand.
The bank’s total assets grew 23 percent to P692 billion, but kept its nonperforming loans (NPL) ratio low to only 1.76 percent.
Consolidated NPL coverage ratio averaged only 91.29 percent.
China Bank’s deposits grew 22 percent to P578.04 billion during the period, as its low-cost current accounts and savings account deposits grew 25 percent.
The bank attributed its strong deposits growth to the setting up of new branches across the country.
“Our distribution network has grown almost four times from only 148 branches in 2007 to 569 branches as of September 2017, of which 158 are from China Bank Savings,” Whang said.
Total capital funds reached P82.38 billion, up 29 percent from the same period last year folloing China Bank’s P15-billion capital, raising exercise in May. Its common equity Tier 1 ratio hit 13.85 percent and total capital adequacy ratio stood at 14.65 percent.