By James A. Loyola
China Banking Corporation reported new record highs in 2019 as net earnings rose 24 percent to ₱10.1 billion, driven by the sustained robust growth of its core businesses.
In a disclosure to the Philippine Stock Exchange, the bank said this translated to an improved return on equity of 11.04 percent and a return on assets of 1.10 percent.
China Bank President William C. Whang said “2019 was an outstanding year for China Bank. Our financial performance exceeded our projections and puts China Bank, 100 years-strong this year, in a better position to meet the opportunities and challenges ahead.”
Net interest income rose 14 percent to P26.1 billion, while fee-based income jumped 49percent to P8.4 billion, driven mainly by service charges, fees and commissions, as well as trading and securities gains.
The ongoing upgrading of systems, processes, infrastructure, and manpower resulted to a higher total operating cost of P20.3 billion, up 13 percent.
With the significant increase in operating income, cost-to-income ratio improved to 59 percent from 63 percent, even as the Bank continued to invest heavily in the needed improvements to provide the best service to customers.
Total resources grew 11 percent to P962 billion, pushing the Bank closer than ever to its P1 trillion asset goal by 2020.
Gross loans expanded 13 percent to P578 billion, driven by higher demand across all segments. Consumer loans, which accounted for almost a fifth of the Bank’s total loan portfolio, grew 23 percent to P107 billion.
Asset quality remained healthy amid the loans growth, with a gross non-performing loan (NPL) ratio of 1.5 percent and NPL cover at 129 percent.
Total deposits jumped 7 percent to P775 billion, supported by the P11 billion growth in checking and savings account (CASA) deposits.
The Bank’s successful fund raising via the issuance of P30 billion retail bonds and US$150 million IFC green bonds also helped improve the Bank’s funding flexibility in 2019.
Total capital stood at P96 billion, up 9 percent. Capital adequacy ratios remained healthy with common equity tier (CET) 1 ratio at 12.8 percent and total capital adequacy ratio (CAR) at 13.7 percent.