China Bank Q1 profit up 61%

Sy family-led China Banking Corp. grew its first quarter net profit by 61 percent year-on-year to P3.6 billion on the back of higher fee-based earnings and trading gains, lower cost of funds and improved operational efficiency.

This translated to an improved return on equity of 13.4 percent and return on assets of 1.4 percent, compared to 9.2 percent and 0.9 percent in the same quarter last year.Core businesses

Amid the economic downturn due to the pandemic, China Bank reported a strong growth in its core businesses even as it had to provide higher coronavirus (COVID-19) pandemic-related buffers and absorb the one-time impact of the new tax law on deferred tax assets.

The bank’s gross loan book declined by 3 percent year-on-year to P572 billion as loan demand remained weak due to the lingering economic uncertainties. Nonetheless, net interest income improved by 16 percent year-on-year to P9.2 billion as lower cost of funds made up for the sluggish interest earnings. Net interest margin improved to 4.2 percent from 3.8 percent in the same period last year.

The bank reported a three-fold expansion in fee-based income to P3.6 billion, while trading and securities gains hit P2.2 billion.