China Bank unit sees another banner year; H1 earnings up

The thrift banking arm of Sy family-led China Banking Corp. is seeing another banner year after its earnings in the first semester grew by 18 percent to P1 billion on the back of its expanding loan portfolio.

China Bank Savings (CBS) on Friday said they were already nearing their 2023 full-year record earnings of P1.8 billion.

Gross loans in the first half of the year expanded by 22 percent to P125.8 billion, buoyed by growth in consumer and automated payroll deduction (APD) loans.

CBS offers APD loans to teaching and nonteaching personnel of educational institutions in the country. They may borrow up to P1 million, which is payable in up to 48 months, the bank said in its website.

CBS’ nonperforming (NPL) loans ratio stayed at 3.3 percent. NPLs refer to loans that are unlikely to be repaid by the borrower.

“This 2024, the outlook for the country and for CBS is positive,” CBS president James Christian Dee said in a statement. “A sustained downtrend in inflation should be a tailwind for the economy this year.”

Earlier, CBS, the country’s second largest thrift bank, said it expected its loan portfolio to breach the P151-billion mark by next year as it braces for a possible surge in loans once the Bangko Sentral ng Pilipinas (BSP) starts cutting interest rates.

By the end of the year, CBS expects to see P130 billion in total loans to help reach its full-year income target of P2.15 billion.

Currently, the BSP’s key policy rate stands at 6.5 percent. The Monetary Board is projected to slash this by a total of 50 basis points this year.

CBS chair Ricardo Chua previously said strong demand from a younger workforce could drive growth, particularly through digital banking, one of the bank’s priority projects.

Meanwhile, deposits at CBS in the January to June period grew by a quarter to P152.8 billion.

“Increasing deposits is a point of emphasis for CBS as it works to improve personal financial wellness nationwide,” it said.

CBS currently has 238 branches nationwide, 168 of which have APD lending centers. —Meg J. Adonis