EastWest Bank posts 4% net income growth in 2020 at P6.5B

Gotianun-led EastWest Banking Corp. saw a relatively flat growth in its profit in 2020 due to disruptions brought by the COVID-19 pandemic on its business and on the economy.

In a disclosure to the Philippine Stock Exchange on Wednesday, EastWest Bank reported a net income of P6.5 billion, up 4% from P6.2 billion in 2019.

“The pandemic defined EastWest’s operating results in 2020. Lockdowns, social distancing, and limited mobility resulted in the economy contracting by 9.5% and appropriately prompted the monetary authorities to loosen financial conditions,” said EastWest Bank CEO Antonio Moncupa.

“For EW, this meant lower growth as the uncertainties put resiliency at the top of its agenda. It also resulted in lower volume of new business, less transactions across all businesses, and higher provisions for loan losses. On the other hand, lower rates and the consequent lower funding costs resulted in higher net interest margins and higher trading gains. These offsetting tendencies drove the flattish operating results of the Bank,” Moncupa said.

The bank’s net revenues rose by 16% to P33.4 billion from the previous year.

Net Interest Income stood at P26.5 billion, up 23% year-on-year mainly due to lower funding costs.

EastWest Bank’s total provisions for potential loan losses due to COVID-19 pandemic amounted to P9.8 billion, “2.4x higher from last year’s P4.0 billion.”

Non-interest Income, on the other hand, dipped by 5% to P6.9 billion due to decline in fees and other income due to the pandemic induced slowdown in business activities.

Total loans and receivables were down 9% to P243.7 billion, mostly due to contractual maturities and lower overall demand as businesses and households held off borrowing due to the pandemic.

Deposits, on the other hand, increased by 8% to P329.1 billion, with low-cost CASA (current account/savings account) increasing by 23% to P228.8 billion.—AOL, GMA News