China Bank nets P3.6B in Q1, up 61%

Sy-led China Banking Corp. saw a sustained profitability in the first three months of 2021 despite the challenging business environment amid the COVID-19 pandemic.

In a disclosure to the Philippine Stock Exchange on Thursday, China Bank reported a net income of P3.6 billion, up 61% from P2.2 billion in the same period last year.

The bank’s net interest income rose to 16% year-on-year to P9.2 billion from P7.9 billion, mainly due to the 52% drop in interest expense.

Fee-based income also grew three-folds to P3.6 billion from P1.2 billion a year earlier, driven by strong trading and securities gains of P2.2 billion.

To address potential loan defaults that may arise the pandemic, China Bank said it booked credit provisioning of more than five times to P2.2 billion from P412 million in the same period last year.

The bank’s gross loans declined by 3% to P572 billion as loan demand remained weak due to the lingering economic uncertainties.

“We will further strengthen our liquidity position, maintain adequate capital, and enhance credit risk management while working with our customers who are severely impacted by the pandemic,” said China Bank chief finance officer Patrick Cheng said.

Total deposits rose 4% to P817 billion, on the back of 23% growth in checking and savings accounts.

To diversify funding sources, the bank said it issued P20 billion in fixed rate bonds in February.

China Bank is also planning to raise up to P100 billion over the next three years via retail bonds or commercial papers to support its strategic initiatives and expansion program, as well as the country’s economic recovery.—LDF, GMA News