China Banking Corporation (Chinabank) posted a 10 percent improvement in net income to P16.2 billion in the first nine months of 2023 from P14.7 billion in the same period last year.  

In a disclosure to the Philippine Stock Exchange (PSE), the bank said this translated to a return on equity of 15.6 percent and a return on assets of 1.6 percent.

Chinabank said its bottom line in the last nine months improved on the back of robust growth from core businesses and lower loan loss provisions.  

For the third quarter alone, the bank netted P5.4 billion in profits, up 16 percent from the same period last year. 

“Chinabank’s sustained growth reflects the successful execution of our business strategies,” Chinabank President & CEO Romeo D. Uyan Jr. said. 

He noted that, “despite the current high interest rate environment, we continue to grow our bottom line by preserving our margins, managing our overall costs effectively, and bringing greater efficiencies to our operations with technology.”

Net interest income grew by 16 percent to P39.2 billion as the 44 percent surge in top line revenues cushioned the nearly triple increase in interest expense. Net interest margin was maintained at 4.2 percent.  

The bank reduced its total credit provisions to P1.3 billion given its stable portfolio quality. Despite this, non-performing loans (NPL) cover remained better-than-industry at 126 percent.     

Operating expenses increased by 14 percent to P20.5 billion, driven by higher manpower and inflation-related expenses and bigger volume and revenue-related taxes.  Cost-to-income ratio remained healthy at 50 percent.

Chinabank remains as the fourth largest private domestic bank with total assets of P1.4 trillion, up 11 percent year-on-year.

Gross loans grew by 10 percent year-on-year to P765 billion, driven by the 19 percent expansion in consumer loans, particularly teachers’ loans and credit cards. 

The bank’s level of bad loans continued to be manageable, posting a better-than-industry average NPL ratio of 2.2 percent.  

Total deposits increased by 14 percent to P1.1 trillion resulting to a 49 percent CASA ratio as term deposits grew year-on-year.

"Our balance sheet remains strong.  A quality loan book has helped us during a period of rising interest rates.  We also continued to optimize our capital structure, maintaining strong capital generation and asset quality,” Chinabank CFO Patrick D. Cheng said.   

Total capital grew by seven percent to P141 billion, with Common Equity Tier 1 Ratio at 14.9 percent and Total Capital Adequacy Ratio at 15.8 percent, well above the minimum regulatory requirement. Book value per share was at P52.50, up seven percent.