Two commercial banks on Thursday reported growth in profits for the first semester of the year due to healthy earnings from core lending and fee-based services, and hefty trading gains.
Taipan Lucio Tan-led Allied Banking Corp. posted a 22.7-percent year-on-year jump in its first semester attributable net profit to P728 million.
East West Bank of the Gotianuns also registered a 3-percent improvement in its first-half net to P910 million in the same period last year.
For the second quarter, however, Allied Bank’s net profit fell by 41 percent to P249.9 million due to rising overhead expenses and foreign exchange losses.
Including minority interest, Allied Bank’s net profit for the first semester amounted to P822.301 million, 20.86 percent higher year on year. This was attributed mainly to the bank’s other incomes, which rose by P536.25 million, or 10.73 percent, on the back of increases in trading gains (by P644.349 million, or 473.27 percent), commissions and handling charges (by P34.901 million, or 10.50 percent) and miscellaneous income (by P54.370 million, or 5 percent).
On the expenditure side, Allied Bank slashed its interest expenses by P19.702 million, or 1.47 percent, particularly interests on deposit liabilities.
East West Bank’s second-quarter net profit went up by 2 percent to P450 million due to core earnings growth and trading income on fixed-income securities.
For the first semester, the bank’s operating income went up by 32 percent year on year to P4.45 billion as core earnings—composed of net interest and fee-based income—surged by P572 million, or 18 percent. Specifically, net interest income went up by 18 percent year on year to P2.76 billion while fee-based earnings jumped by 17 percent to P982 million.
East West Bank’s operating income was boosted by securities and foreign exchange trading gains, which increased by 370 percent and 52 percent, respectively, to P573 million and P131.7 million.
In the meantime, China Bank Corp. posted a 14.27-percent year-on-year drop in its first-semester profit to P2.03 billion due to lower margins on lending and the cost drag of its business expansion.
The six-month figure translated to a 10.15-percent return on equity (ROE) and 1.48 percent return on assets.
Total interest income declined by 3.01 percent year on year to P6.27 billion. The growth in its loan portfolio led to a 9.52-percent year-on-year rise in interest income from loans and receivables to P4.37 billion. The gains were, however, offset by the 14.48-percent drop in income from trading and investment securities.
Net interest margin was computed at 3.07 percent, down from 4.02 percent last year.