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China Bank Q1 profit jumps 24%

/ 05:02 AM May 04, 2019

Sy family-led China Banking Corp. grew its net profit in the first three months by 24 percent year-on-year to P1.9 billion on higher interest income, fee-based earnings and treasury gains, boosted by the sale of idle assets.

Net interest income in the first quarter grew by 12 percent year-on-year to P5.9 billion, driven by the 41-percent jump in interest revenue from loans.

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China Bank also booked a 52-percent year-on-year jump in noninterest income to P1.3 billion as fees, service charges and commissions surged by 34 percent. The bank also recognized income from the sale of acquired assets and positive trading and securities gains.

Higher interest expense, however, compressed net interest margin to 2.94 percent.

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First-quarter operating income hit P7.2 billion, up 18 percent year-on-year, while operating expense rose by 13 percent to P4.8 billion as the bank continued to strengthen and expand its operations.

It spent 66 centavos to earn every peso, more efficient than the 69 centavos for every peso a year ago.

The first-quarter performance translated to a return on equity of 8.42 percent and return on assets of 0.86 percent.

China Bank also declared record high P2.4 billion cash dividends, equivalent to 8.8 percent, or P0.88 per share, 6 percent higher than the previous year’s cash dividends. Based on its current share price of P26.65, the cash dividends translate to a cash yield of 3.3 percent.

Total assets expanded by 23 percent to P889 billion. The loan book rose by 13 percent to P515 billion.

Deposits rose by 17 percent to P720 billion, underpinned by a 20-percent increase in low-cost deposits like checking and savings accounts.

Its nonperforming loans stood at 1.2 percent of total loans. For every P1 of bad loans, the bank put up a buffer of P1.69.

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Its total capital amounted to P89 billion, equivalent to a tier 1 capital adequacy ratio (CAR) of 12.9 percent and total CAR of 13.8 percent, well above minimum requirements. —DORIS DUMLAO-ABADILLA

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