China Bank posts P12.1B net income in 2020, up 20%

Sy-led China Banking Corp. posted a double-digit increase in its bottom line in 2020 on strong performance across its businesses, offsetting the impact of COVID-19 pandemic.

In a disclosure to the Philippine Stock Exchange on Friday, China Bank said it posed a net income of P12.1 billion last year, up 20% year-on-year.

The lender said the strong growth in its core businesses and better investment and trading returns offset the bank’s pandemic-related loan buffer of P8.9 billion, which was 3.5 times higher than in 2019.

Net interest income, meanwhile, grew 30% to P33.8 billion on the back of the 39% drop in interest expense.

Non-interest income, likewise, rose by 19% to P10.0 billion, lifted by trading and securities gains that expanded more than double in 2020 to P5.4 billion.

China Bank said sustained efforts in cost management kept the growth of operating expenses controlled at 6% to P21.5 billion.

Cost-to-income ratio improved to 49% from 59% as income growth continued to outpace expense growth.

“Going into the crisis, China Bank was operationally and financially sound, but what enabled us to remain resilient and to sustain our growth momentum was our employees who went above and beyond in 2020,” said China Bank president William Whang.

“Our relentless efforts to build and maintain robust liquidity and capital levels have positioned the Bank well to weather the ongoing storm, and at the same time, to help our customers and the country recover,” Whang said.

China Bank’s total assets stood at P1.04 trillion, up 8%.

Deposits increased by 8% to P835 billion on the back of 14% growth in checking and savings accounts (CASA).

Healthy CASA deposit generation eased the bank’s overall funding cost and led to a better CASA ratio of 56%, it said.

The lender said its successful fundraising via the issuance of P15 billion fixed-rate bonds in October 2020 also helped improve funding flexibility.

This was followed by another oversubscribed bond offering worth P20 billion, issued and listed on February 18, 2021.

Gross loans ended flat at P572 billion as business customers reduced loan drawdown.

Consumer loans grew 7%, accounting for 20% of the total loan portfolio.

Non-performing loans (NPL) ratio rose to 2.3%, in line with the bank’s expectations.  The bank said its NPL cover remained sufficient at 128%.

“We continue to support our customers through the uncertainty of COVID-19, providing credit, debt relief, and payment moratorium while ensuring capital and liquidity preservation. We have formulated strategies to mitigate asset quality issues given the possibility of a drawn out pandemic,” said China Bank chief finance officer Patrick Cheng. —KBK, GMA News