Gotianun group-led EastWest Bank grew its net profit last year by 38 percent to a record-high of P6.2 billion on higher consumer lending and trading gains.
This translated to a return on equity of 14 percent, beating most of its banking peers.
“We are pleased to report our highest recorded income ever even as the bank faced a margin squeeze in 2019,” EastWest chief executive officer Antonio Moncupa Jr. said in a disclosure to the Philippine Stock Exchange on Friday.
The bank’s net interest margin stood at 6.9 percent for the full year, lower than the 7.4 percent registered in 2018 but better than the average margins of other local banks.
“We expect a reversal in 2020 and recover a good part of the lost margins,” Moncupa said.
Margins recovered to 7.6 percent in the last quarter from the 6.4 percent dip in the first quarter of 2019, where deposit costs skyrocketed due to tight market liquidity.
“Better global and domestic market liquidity should drive deposit costs lower. We also expect our balance sheet to post decent growth as the country is expected to be among the more resilient economies even with COVID-19 and the resulting slowdown in the advanced economies and China,” he added.
EastWest remains the most “consumer-centric” universal bank, with consumer loans accounting for 73 percent of its total loan book.
Its consumer loans rose by 14 percent for the year, while the total loan book grew by 9 percent.
Net revenue rose by 13 percent to P28.7 billion. Net interest income accounted for P2.2 billion of the P3.2-billion increase while the remaining balance comprised of fees, commissions and treasury gains.
Securities trading gains grew by a combined 16 percent or P1 billion to P7.25 billion.
Operating expenses, excluding provisions for losses, increased by 8 percent to end at P16.4 billion in line with the growth of its earning assets.
The bank spent 57 centavos to earn every peso last year, lower than 60 centavos spent to earn every peso in 2018.
Provisions for probable losses went up by 3 percent to P4 billion.
Market liquidity and deposit costs improved considerably in the last five months of 2019, the bank reported.