China Banking Corporation posted a 23 percent jump in net income to P8.2 billion from January to September 2020, translating to an improved return on equity of 11.15 percent.
In a disclosure to the Philippine Stock Exchange, the bank said that, for the third quarter 2020, net earnings hit P3.0 billion, 21 percent more versus third quarter 2019.
As the global pandemic continues, China Bank sustained the growth of its core businesses. Loans and deposits rose by 6 percent year-on-year to P595 billion and P827 billion, respectively, for a loans-to-deposit ratio of 72 percent.
Total assets increased by P60 billion to reach P1 trillion, ahead of the Bank’s year-end target. Return on assets improved to 1.11 percent.
“The year 2020 has been very challenging, but with the hard work and commitment of our employees, we are able to pull through and provide the needed banking services and support to our clients,” said China Bank President William C. Whang.
He added that, “We are still expecting continuing challenges from a difficult environment, and the results give us the buffer to absorb further stresses down the road.”
Net interest income for the nine-month period jumped by 35 percent to P25 billion mainly from the 36 percent drop in interest expense. This led to a higher net interest margin of 3.89 percent.
Fee-based income likewise increased by 35 percent to P7 billion as trading gains surged 3.6 times and income from its trust business grew by 15 percent.
Operating income without trading gains reached P28 billion, up 24 percent year-on-year. Operating expenses grew by 6 percent to P16 billion, mainly from pandemic- and volume-related costs.
China Bank said it continues to work with borrowers experiencing financial difficulty under the current circumstances. With the expected impact of the pandemic and lockdown measures on asset quality, the Bank hiked its provisions for probable credit losses to P6.3 billion, 12 times bigger than last year.
Non-performing performing loans (NPL) ratio settled at 2.5 percent in September 2020, while NPL cover for the period remains sufficient at 104 percent.
Total capital rose by 9 percent to P101 billion, with CET 1 ratio of 13.08 percent and total CAR of 13.99 percent, both well above regulatory requirements. “Amid the pandemic, China Bank’s capital and liquidity position remains strong. We continue to productively deploy resources to drive strategic growth, finance our clients’ needs, and contribute to the country’s economic recovery,” said China Bank Chief Finance Officer Patrick D. Cheng.