Gotianun-led EastWest Bank (EW) posted a net income of P1.6 billion in the first quarter of 2023, three times higher than the same period last year of P508 million as the full impact of its 2022 asset build-up has started to bear fruit. In a disclosure to the Philippine Stock Exchange, the bank said its net revenues were 34 percent higher at P7.8 billion on the back of lending expansion that brought net interest income (NII) to P6.1 billion, 17 percent higher from last year. Broken down, interest income grew by P1.8 billion, coming largely from loans, while interest expense grew by P870 million as the higher interest rate environment manifested in higher funding costs. Nonetheless, the Bank’s net interest margin (NIM) ended at 7.4 percent. Complementing revenues were higher non-interest income which grew by 2.8 times to P1.7 billion. Fees and commissions surged by 71 percent as banking transactions continued to improve. In contrast to last year’s trading losses, gains on trading also contributed to the revenue growth this year. “The Bank is fortunate to ride the tailwinds of the country’s economic recovery and we are already seeing the results of our decision to accelerate lending activities last year,” EW President Jackie S. Fernandez said. She added that, “This resulted in core revenues growing by 26 percent. We expect this momentum to continue moving forward.” Meanwhile, operating expenses were at P4.8 billion, driven largely by investing in manpower, IT development and business-related expenses. The Bank continues to invest on IT systems meant to improve its digital services to customers and employees. Cost-to-income ratio improved to 61 percent. Total assets ended at P403 billion as the Bank deployed its excess liquidity towards high-yielding consumer loans and long-term securities. Loans of P260.8 billion grew by 19 percent, driven by credit cards, auto and key salary loan segments. This structure allows the Bank to have industry leading margins (NIM). On the funding side, total deposits were stable at P319.4 billion, with CASA ratio improving to 80 percent, from last year’s 76 percent. Capital ratios continue to stand at a healthy 14.4 percent and 13.6 percent for Capital Adequacy Ratio (CAR) and Common Equity Tier 1 (CET1) ratio, respectively, well above the regulatory requirements. “Our continued focus on redeploying our resources to higher earning assets has allowed us to gain ground as far as the Bank’s earning capacity is concerned,” said EW Chief Executive Officer Jerry G. Ngo. He noted though that, “Headwinds remain as we expect funding costs to stay elevated and the impact of a possible US recession to hit closer to home.” “We are prepared for this and remain vigilant on economic developments. We will be open to adjusting our approach, if necessary. We believe however, that our well- positioned consumer-centric business model will still lead to better results this year,” Ngo added.