China Banking Corporation reported a 39 percent jump in net profit to P10.1 billion in the first six months of 2022 from the P7.3 billion earned in the same period last year.
In a disclosure to the Philippine Stock Exchange, the bank said earnings growth was driven mainly by higher net interest income and core fee income as well as lower provisions.
The robust income performance translated to a better return on equity and return on assets at 16.4 percent and 1.7 percent, respectively.
Net interest income rose 16 percent to P22.0 billion from 18.9 billion on the back of stronger top line revenues and steady movement in interest expense. As a result, net interest margin was maintained at 4.3 percent.
The decline in trading and foreign exchange gains weakened fee-based income by 46 percent to P3.2 billion from P5.9 billion in the first half of 2021.
However, core fee income increased 24 percent, driven mainly by double-digit growths in service charges, fees, and commissions, income from sale of acquired assets, and bancassurance.
Reflecting its positive economic outlook and its improving asset quality, the Bank reduced its credit provisions by 69 percent to P1.7 billion.
Gross non-performing loans (NPL) ratio was at 2.3 percent, 120 bps lower versus last year and better than industry average. Meanwhile, NPL cover remained sufficient and above industry at 128 percent.
Efficiency enhancements and judicious cost management kept operating expenses flat year-on-year, further improving cost-to-income ratio to 44 percent.
“The sustained growth puts China Bank in a stronger position to support customers and the economy in this period of recovery,” China Bank President William C. Whang said.
Throughout the pandemic, the Bank has consistently recorded quarterly income growth. “For the second quarter of 2022 period, China Bank's net income breached the P5-billion mark, a first in the Bank's more than 100-year-old franchise,” Chief Finance Officer Patrick D. Cheng said.
China Bank remains one of the largest banks in the country. As of June 2022, consolidated assets were recorded at P1.2 trillion, up 17 percent. Loans expanded 14 percent to P655 billion on the back of significant growths in both business and consumer loans.
Total deposits likewise increased 14 percent to P945 billion, as the Bank sustained a 14 percent year-on-year build-up in current and savings accounts.
Total equity jumped 16 percent to P127 billion with Common Equity Tier 1 Ratio and Total Capital Adequacy Ratio of 14.8 percent and 15.7 percent, respectively, well above the minimum regulatory requirement.