Chinabank's profit jumps 24% to P5.2B despite pandemic
China Banking Corporation reported a 24 percent jump in net income to P5.2 billion in the first half of the year despite the community quarantine.
In a disclosure to the Philippine Stock Exchange, the bank said this translated to a return on equity of 10.64 percent and return on assets of 1.07 percent.
It added that, the growth was achieved even as the Bank ramped up provisions more than fourteen times to P4.8 billion in anticipation of the impact of COVID-19 and ongoing quarantine measures on asset quality.
"Our first half results reflect China Bank’s continued strength and resilience, and demonstrate the soundness of our strategies to thrive in the new normal,” said China Bank President William C. Whang.
He noted that, “The year2020 will go down in China Bank’s history, not just for our centennial anniversary, but for our resolve to make the best out of a very difficult situation, keeping in mind the safety and welfare of our stakeholders.”
Total operating income rose 40 percent year-on-year to P21.0 billion.
Net interest income grew 39 percent to P16.2 billion on the back of higher volume of earning assets and lower funding costs as market interest rates declined. Net interest margin improved to 3.8 percent from 3.2 percent.
Meanwhile, non-interest income surged 41 percent to P4.7 billion primarily fromstrong trading and securities gains, which grew 212 percent to P2.8 billion.
“Our balance sheet reflects ample liquidity and sufficient capitalization. We are closely monitoring developments and working with our customers who are under financial distress in these difficult times,” said China Bank Chief Finance Officer Patrick D. Cheng.
He added that, “While the long-term impact of the global pandemic on the Philippine economy and banking industry remains uncertain, we are confident that China Bank’s enduring financial strength will enable us to navigate the new or even the next normal.”
Total assets grew 8 percent to P982 billion due primarily to loan growth.
The Bank’s loan portfolio expanded 11 percent to P593 billion as the Bank continued to provide credit across market segments.
Asset quality remained healthy amid the loans growth, with a non-performing loan (NPL) ratio of 1.6 percent and NPL cover at 146 percent.
On the funding side, total deposits grew 3 percent to P773 billion with CASA at 53 percent. Total capital stood at P98 billion, up 8 percent year-on-year.
“In these uncertain times, we remain cautiously optimistic. We are adapting our strategies accordingly and managing our capital with the prudence that the current volatility calls for. I am convinced that we could overcome the difficulties,and like in the last 100 years, we would do so by standing by our customers, cooperating with regulators, and doing our part to fight this pandemic and emerge stronger together,” said Whang.