Gotianun-led East West Banking Corp. aims to increase its profit by nearly a third this year while slowing down on branch network expansion to consolidate the core business.
“We believe that we have seen the worst of the expansion costs in 2015. Starting this year 2016, we should start to harvest the early fruits of the expansion. We will consider it disastrous if core recurring income, which is income before trading and one-off income and expense items, does not increase by at least 15 percent. Net income should increase by at least 30 percent,” president and chief executive Antonio C. Moncupa Jr. said at EastWest Bank’s annual stockholders’ meeting Friday.
Growth this year will reverse the 3-percent drop in profit last year to P2 billion, which the bank had attributed to lower trading gains as well as higher credit provisions and tax expenses.
“Our net income was low as we have yet to gain the necessary efficiencies to generate the return from the huge investments we put in expanding EastWest Bank’s footprint, not only of its stores but likewise all the other businesses. We are glad to have passed that most difficult stage,” he said.
Following the completion of EastWest Bank’s expansion program last year, they now have the fifth biggest store network excluding subsidiaries and the seventh largest network including subsidiaries, Moncupa said.
Amid growth, Moncupa told stockholders that the bank “may need to have another round of capital raising.”
“We project this to be the last capital infusion to support organic growth and bring EastWest Bank to the scale necessary to compete effectively with the bigger banks,” he said.