China Bank net profit rises 7.5%

China Bank of tycoon Henry Sy posted a net profit of P3.38 billion in the first nine months—7.5 percent lower than the level seen a year ago due to slower fee-based revenues.

But the bank maintained a comfortable return on equity of 13.95 percent even as it invested heavily to expand distribution capability.

In a disclosure to the Philippine Stock Exchange last week, China Bank reported that its lending book grew by 20.8 percent year on year in the first nine months to P127.91 billion, attaining growth across all segments: corporates by 21 percent, commercial by 32 percent, and consumer by 10 percent.

Net interest income slightly grew by 1.21 percent to P6.44 billion, while other recurring income improved by 3.57 percent to P1.62 billion driven by higher revenues from acquired assets and trust operations.

The business of bancassurance, or the cross-selling of insurance products through bank products, grew by a hefty 54 percent year on year. There are “strong” indications that growth for the whole year will exceed expectations, the bank said.

During the period, China Bank’s asset base grew a modest 2.47 percent to P237.89 billion and deposits rose by 2.84 percent to P194.49 billion. Low-cost funds increased by 15.51 percent to P72.53 billion, accounting for a slightly bigger share—49.18 percent—of total peso deposits. Consequently, the bank’s loan to deposit ratio improved to 73.17 percent from 58.67 percent.

In terms of asset quality, the ratio of nonperforming loans stood at 3.14 percent of total loans, while loan loss provisioning coverage amounted to 145.8 percent, well above the industry average.—Doris C. Dumlao