East West Bank nets P3.4B

Gotianun-led East West Bank grew net profit last year by 70 percent to P3.4 billion on higher recurring income.

The bank grew its loan book by 29 percent to P202 billion, while total deposits went up by 30 percent to P240 billion, underpinned by a 38-percent increase in low-cost deposits.

Core recurring income went up by 25 percent.

The bank sustained its industry-leading net interest margin of 7.7 percent. Net interest margin, net of provisions for loan losses, was recorded at 4.9 percent, still the highest among universal and commercial banks.

EastWest pitches itself as the most consumer-focused universal bank in the country with more than half its loan portfolio lent to consumers.

“As previously mentioned, 2016 will show the early results of our expansion program that started in 2012. This puts behind us the worst of the initial pain of the program that brought us to have the seventh largest store network but kept our income flat at P2 billion in the previous three years,” said EastWest president and chief operating officer Antonio Moncupa Jr.

The bank had targeted to grow earnings by 50 percent last year as it expected to reap the fruits of an aggressive expansion program that saw its nationwide branch network almost triple in five years to 445, including the distribution channel of its rural bank subsidiary.

East West Bank’s net revenues rose by 34 percent to P22 billion, while operating expenses rose 21 percent to P12 billion.

“Our productivity is improving as the
overhead cost related to the expansion of the last three years gain traction. And that is just the start. We expect further improvement in operating leverage and subsequently, better returns to our investors in the coming years,” Moncupa added.

Total assets increased by 25 percent to P292 billion, led by the 51 percent increase in its consumer loan portfolio.