EastWest income up 117% as loans breach prepandemic peak

The Gotianun family’s East West Banking Corp. doubled earnings in the first semester of 2023 as loans eclipsed prepandemic levels while lending rates climbed.

The listed bank said net income from January to June surged 117 percent to P3.3 billion, improving its return on equity to 10.6 percent.

Net interest income during the period reached P13 billion, up 18 percent versus the same period last year, as loans and receivables jumped 22 percent to nearly P274 billion amid the growth of higher-yielding consumer debts.

EastWest’s consumer lending portfolio, which gained 27 percent over the past year, accounted for 77 percent of total loans. Growth drivers were credit cards and automotive and salary loans.

“Our ramping-up initiatives on our consumer lending portfolio that started last year are now showing results,” EastWest president Jackie Fernandez said in a statement.

“While we have surpassed our prepandemic peak loan levels this quarter, the work is not complete as we focus on optimizing our balance sheet structure to unlock more value,” she added.

EastWest said noninterest earnings during the semester also doubled to P3.3 billion.

Fees and commissions were up by 70 percent to P2.3 billion while securities and foreign exchange trading income reached P403 million.

EastWest ended the first half with total assets of P434 billion, up 4.6 percent.

Meanwhile, total deposits were flat at about P335 billion. Current account and savings account (Casa) deposits, used by the bank for higher-yielding financing and investments, were up 6.9 percent to P272.4 billion, bringing the Casa ratio to 80 percent.

Its capital ratios stood at 14 percent and 13.2 percent in terms of capital adequacy ratio and common equity tier 1 ratio, both of which were above regulatory requirements.

“Our first half results speak a lot about the hard work and dedication of the team on all fronts,” EastWest CEO Jerry Ngo said in the statement.

“And while we exceeded our prepandemic loan levels this quarter, we further managed to improve our funding mix which is key to maintaining our industry-leading margins,” he said.

“We are also progressing steadily on our people and IT initiatives that will bring us to our next chapter of growth. We still have ways to go as far as profitability is concerned but our bigger and stronger asset base will get us there,” he added. INQ