China Bank profit down 2.1% in Sept

Sy family-led China Banking Corp. posted a P5.56-billion net profit at end-September, 2.1 percent lower year-on-year, due to a decline in trading gains.

Consolidated operating income grew by 8 percent year-on-year to P20.72 billion, driven by sustained growth of its core businesses.

Excluding trading and one-off gains, operating income was up by 16 percent, the bank disclosed to the Philippine Stock Exchange yesterday.

The bank’s loan book increased by 16 percent to P507.83 billion, with growth across all segments. Consumer lending expanded by 19 percent.

On the funding side, total deposits rose by 20 percent to P691.66 billion, supported by a 29-percent growth in low-cost deposits to P394.98 billion.

Interest earnings from loans and investment securities led to a 20-percent rise in net interest income to P17.08 billion. Year-to-date net interest margin improved to 3.17 percent.

Noninterest revenues dropped by 26 percent to P3.64 billion. In general, however, rising interest rates curbed banks’ trading gains.

China Bank’s operating expenses for the nine-month period stood at P13.11 billion. Assets grew by 18 percent to P816.20 billion, driven by loan expansion.

Even as lending grew, asset quality improved. The bank’s nonperforming loans fell to 1.23 percent as a ratio of total loans from 1.76 percent previously. For every P1 of bad loan, the bank has set aside a buffer of P1.21.

Total capital adequacy ratio of the bank stood at 13.02 percent of risk assets. Counting only the core or common equity tier 1 capital, the ratio stood at 12.29 percent.