China Bank profit up 46% in first half of 2013

China Banking Corp. posted a 46-percent year-on-year growth in first semester net profit to P2.96 billion on higher interest income, trading gains and fee-based earnings.

This translated to a return on average equity of 13.24 percent and a return on assets of 1.81 percent, the bank said in a statement.

On core lending activities, net interest income rose by 12 percent to P4.43 billion as the bank expanded its loan book by 10.74 percent to P189.87 billion.

This was underpinned by increased commercial and consumer loans.

The increase in earning assets was covered by a 22-percent expansion in deposits to P290.25 billion on the back of sustained growth in low-cost deposits, which rose by 35 percent year-on-year to P112.11 billion.

Non-interest income likewise jumped by 44 percent to P3.47 billion due to trading gains, commissions, sale of acquired assets and fees from new revenue streams like bancassurance.

Gross revenues improved by 18 percent to P10.23 billion, driven by higher fee-based revenues. On the other hand, total operating expenses rose by 15 percent to P4.48 billion, translating to a cost efficiency ratio of 56.80 percent.

Expenditures increased as the bank continued to make hefty investments to expand its operations.

China Bank bought Unity Bank last year to be merged with its thrift bank subsidiary China Bank Savings (CBS) this year.

The group has far opened 12 branches, two for the main bank and 10 for the savings bank, including the mini branches in Savemore Market.

Total resources reached P345.62 billion at end-June, up by 20 percent year-on-year.