China Bank 9-mo. profit jumps 31%

Sy family-led China Banking Corp. booked a 31-percent year-on-year increase in its nine-month net profit to P4.84 billion as large treasury gains added to higher interest earnings and fee-based income.

The January to September earnings performance translated to a return-on-equity of 10.47 percent and return-on-assets of 1.19 percent, the bank disclosed to the Philippine Stock Exchange Thursday.

“We are pleased to note that our core business drivers continue to show robust growth,” said China Bank president Ricardo Chua. “These positive results indicate we are on track to meet our business goals for this year, especially with the turnaround of our China Bank Savings (CBS) subsidiary into a significant contributor to group profitability.”

The bank’s total operating income expanded by 16 percent year-on-year to P16.46 billion in the first nine months, buoyed by a 9-percent rise in net interest income to P12.26 billion.

The increase in interest income was in turn driven by the 19 percent growth in loan portfolio alongside a stable net interest margin of 3.22 percent.

Fee-based revenue also improved by 42 percent year-on-year to P4.21 billion, boosted by trading and securities gains which had risen by 226 percent to P1.19 billion. The bank also saw a 13 percent growth in service charges, fees and commissions while booking a 123-percent increase in income from acquired assets acquired.

The growth of operating expenses was controlled at 9 percent to P10.08 billion even as the bank continued to invest more in human resources as well as in putting up new branches and automated teller machines (ATMs).

Total assets expanded by 20 percent year-on-year to P564.79 billion in tandem with the growth of  core businesses.

The bank grew its loan book by 19 percent to P343.10 billion, driven by the 24 percent growth in consumer loans.

On the funding side, total deposits grew by 21 percent to P472.77 billion, underpinned by the 12 percent increase in low cost deposits which amounted to P244.44 billion or 51.7 percent of total deposits.

For every P1 of deposits generated, the bank has turned 72.57 centavos into earning assets by lending them out.

Total capital funds ended September at P63.85 billion, up by 10 percent. Core or tier 1 capital stood at 12.4 percent while total capital adequacy ratio to risk assets stood at 13.32 percent. —Doris Dumlao-Abadilla