MANILA, Philippines – Sy family-led China Banking Corp. saw profits last year hit a record P22 billion amid the robust performance of its core businesses.
Net income grew 15 percent from the same period in 2022, translating to a return on equity of 15.5 percent and return on assets of 1.6 percent, a stock exchange filing on Tuesday showed.
“Our strong growth in 2023 solidifies our position as one of the top four banks in the country,” Chinabank president and CEO Romeo D. Uyan Jr. said in the filing.
“We remain focused on executing our business strategies while leveraging our investments in digitalization to deliver better services to our customers,” he added.
Chinabank’s net interest income jumped 17 percent to P53.5 billion, bolstered by the “strong growth in loans and investments”. The bank’s net interest margin was stable at 4.2 percent.
Gross loans up 10%
Gross loans climbed by 10 percent to P791 billion. It also underscored the 23 percent share of consumer loans to the total loan portfolio.
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Moreover, Chinabank’s non-performing loans ratio in 2023 was at 2.5 percent, above the 2.3 percent recorded last year, while the NPL coverage stood at 104 percent. Nevertheless, the bank cut credit loss expenses to P1.2 billion the past year.
“Our continuous drive for operational efficiency and the strong client demand for our services underpin our solid financial performance in 2023,” Chinabank chief finance officer Patrick D. Cheng said in the filing.
“We will continue to strengthen our business fundamentals and capabilities to sustain our growth momentum in the coming years,” he added.
Investments in IT
The lender said operating expenses rose 11 percent to P27 billion “on bigger volume-related taxes and heavier investments in manpower and IT”.
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“Simultaneously, substantial overhauls are underway within Chinabank’s IT architecture as an integral component of its ongoing digital transformation endeavors. Cost-to-income ratio was at 50 percent,” Chinabank explained.
The bank’s assets rose 11 percent P1.5 trillion in 2023 while total deposits expanded by 11 percent to P1.2 trillion, with 48 percent parked in low-cost current and savings account deposits.
Total equity rose 12 percent to P150 billion, while its common equity tier 1 ratio (15.3 percent) and total capital adequacy ratio (16.1 percent) were well above regulatory requirements.