China Banking Corporation posted a 25 percent increase in net income to P15.1 billion last year on the back of sustained core business growth and effective cost management.

In a disclosure to the Philippine Stock Exchange, the bank said its earnings translated to an improved return on equity and return on assets of 13.6 percent and 1.5 percent, respectively.

China Bank continued to prudently manage interest expense, which dropped 44 percent, resulting in a net interest income of P38.3 billion, up 13 percent, and better net interest margin of 4.2 percent. Meanwhile, credit provisioning was steady at P8.9 billion.

Fee-based income grew 3 percent to P10.4 billion, underpinned by a 39 percent increase in core fee-based income such as foreign exchange gain, trust revenues, investment banking commissions, sale of acquired assets, bancassurance fees, and other transaction-based service charges.

The growth in operating expenses was controlled at 4 percent to P22.3 billion. The sustained efforts to manage expenses while investing in growth strategies resulted in a better cost-to-income ratio of 46 percent from 49 percent.

“Our 2021 results reflect our disciplined execution of strategies and commitment to supporting our customers and employees,” said China Bank President William C. Whang.

He noted that, “As we increasingly automate and digitize to navigate the continuing challenges of this pandemic, we are focusing on actions and investments that will redound to superior banking experiences and improved financial outcomes.” China Bank closed 2021 with P1.1 trillion in assets, up 7 percent, supported by a 9 percent expansion in loans.

Meanwhile, deposits increased 3 percent to P863 billion which was driven by an 18 percent build-up in checking and savings accounts (CASA) deposits.

“We deployed more loans to businesses to aid their recovery while continuing to support the credit needs of consumers,” said China Bank Chief Finance Officer Patrick D. Cheng.

He added that, “We kept a close eye on asset quality, maintaining a lower-than-industry non-performing loans ratio of 2.5 percent and adequate NPL coverage of 116 percent. We sustained a robust CASA growth, further improving our CASA ratio to 64 percent from 56 percent.”

Total equity increased 13 percent to P119 billion, with a common equity tier 1 (CET1) ratio of 14.9 percent and total capital adequacy ratio (CAR) of 15.7 percent, well above the regulatory minimum requirement.