China Bank survives the pandemic with earnings which is rare in a pandemic-induced economic recession in 2020. PHOTO BY DORIS DUMLAO ABADILLA
China Banking Corp. booked higher profits in the first nine months of the year as its core lending business remained resilient despite looming concerns over an economic slowdown.
China Bank—part of the Sy family conglomerate SM Investments Corp.—saw net income during the period surge 31 percent to P14.7 billion compared to the same period last year.
“While there is continuous demand for loans, growth for the third quarter has been more measured in the light of current macroeconomic conditions,” China Bank chief finance officer Patrick Cheng said in a statement on Thursday.
China Bank saw corporate and consumer loans increase 14 percent to P697 billion during the period.
This pushed up net interest income by 17 percent to P33.7 billion as higher volumes helped offset rising interest expenses while net interest margin was maintained at 4.2 percent.
Rising interest costs were triggered by the series of rate hikes implemented by the Banko Sentral ng Pilipinas to combat inflation.
China Bank said fee-based income also grew 6 percent to P8.3 billion due to gains from service charges, fees and commissions, income from the sale of acquired assets and bancassurance.
Meanwhile, loan loss expenses expanded by 7 percent to P6.9 billion for a nonperforming loan coverage of 161 percent, which was above the industry average.