EastWest Bank's H1 income down 18% on lower trading gains

Listed EastWest Banking Corp. posted an 18-percent drop in its first-half net income to P1 billion from P1.28 billion a year earlier on the back of lower trading gains and miscellaneous income, weighed down by higher income taxes.

Net interest income rose 22.7 percent to P4.7 billion while service fees increased by 26.2 percent to P1.5 billion, EastWest said in a disclosure to the Philippine Stock Exchange Friday.

The strong growth in core revenues was driven mainly by the growth in customer loans, coupled with lower funding costs.

Customer loans increased by 29.1 percent to P106.1 billion from January to June while total deposits grew 24.3 percent to P126.1 billion.

Service charges, fees and commission rose 26.2 percent to P1.5 billion mainly coming from transaction and servicing fees of consumer lending and branches.

However, other operating income declined by 56.4 percent to P858.4 million on the back of lower securities trading gains and due to one-off miscellaneous income posted last year.

Total operating expenses, including provision for credit losses, was relatively flat at P5.9 billion focused on branch expansion, which brought its total consolidated branch network to 386 to date, with 339 EastWest Unibank branches and 47 EastWest Rural Bank branches.

The banks is on its last phase of expansion and its full impact on operating expenses will reflect this year, EastWest SVP and Chief Finance Officer Rene K. de Borja, Jr. said in a statement.

"We are quite fortunate to have posted strong growth in our core banking businesses. We will continue to focus on consumer and middle market segments and optimize our expanded branch network, which are good sources of recurring income base,” he said. — Danessa O. Rivera/JDS, GMA News