EastWest profit down 15% on slow recovery of loans biz
Gotianun-led EastWest Bank (EW) said 2021 profits dropped over 15 percent to P4.5 billion as business slowed during the pandemic even as it underscored that economic prospects were improving and it was ready to move past setting high loss provisions against bad debts.
The company said in a statement that profitability was hit by lower loan levels, credit card rate cap and normalized trading gains. Revenues also fell 19 percent to P27 billion.
Antonio Moncupa Jr., chief executive of EW, expressed optimism on the business outlook for 2022 despite lower earnings last year. “The good news is our balance sheet is much more resilient in terms of liquidity and capital adequacy. The challenge is, we need to scale up to leverage the bank’s capabilities,” Moncupa said.
“We are hopeful that the pandemic and the Ukraine situation will clear up and we can resume work on the plan to double the balance sheet within the next five years,” he added.
Jacqueline Fernandez, EW chief lending officer, said losses related to bad debts were “largely accounted for and we expect lower loan loss provisions on the existing portfolio in 2022.”The lender said provisions for loan losses fell by 58 percent to P4.1 billion last year.
“The pandemic hit profitability rather hard,” Fernandez said.
“We believe we are largely done with the high loan loss provisions and now that the light at the end of this long pandemic tunnel is finally in sight, we are looking forward to making up for lost ground,” she added.
EW said it booked lower net interest income of P21 billion last year due to lower volumes of auto, mortgage and personal loans compared to prepandemic levels.
“The slow recovery of consumer loans in the industry affected EW more because of its unique loan structure where more than 70 percent of its loans are in consumer loans,” the lender said.
