MANILA -Sy-led China Banking Corp. said net income in the first quarter of 2023 rose 3 percent to P5 billion as strong interest earnings were tempered by a sharp drop in fee-based income.
During the three-month period, total revenue also went up 5 percent to P13.2 billion, a stock exchange filing on Thursday showed.
“The bank continues to do well amidst the challenging operating environment, reflecting the quality of our balance sheet, our prudent management and the strength of our core businesses,” China Bank president and CEO Romeo D. Uyan Jr. said in a statement.
“We are off to a good start as our strong capital position and solid liquidity allow us to play a major role in the reopening and growth of the Philippine economy,” he added.
The country’s fourth-largest private lender saw net interest income increase 18 percent to P12.7 billion as net loans jumped 15 percent to P709 billion. Fee-based income fell 72 percent to P500 million.
Meanwhile, business and consumer loans expanded by 13 percent and 23 percent, respectively, interest expenses grew 207 percent to P5.7 billion amid a series of rate hikes by the Bangko Sentral ng Pilipinas.
Consolidated net interest margin remained healthy at 4.2 percent, the lender said.
Asset quality improved as China Bank recorded a 44 percent drop in credit provisions to P440 million. The lender closed the quarter with a “a better-than-industry” non-performing loans ratio of 2.3 percent and NPL coverage ratio of 118 percent.
China Bank said total assets grew 20 percent to P1.4 trillion as of March 31, 2023 while total deposits expanded by 24 percent to P1.1 trillion.
“We sustained the strong momentum in loans and deposits, outpacing the industry average and reflecting the successful execution of our strategy to strengthen our core businesses, effectively manage resources, and prudently reduce risks,” said China Bank chief financial officer Patrick D. Cheng.
China Bank also increased its capitalization by 11 percent to P139 billion, with a common equity tier 1 ratio of 15.4 percent and total capital adequacy ratio of 16.3 percent.
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