July 19, 2018, 4:08 am
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EastWest H1 net up 60%

Gotianun led EastWest Bank (EW) reported a P2.5 billion net income for the first six months of the year, up 60 percent over the same period in 2016, sustaining the 70 percent and 54 percent growth in 2016 and Q1 2017, respectively. 

EW Vice Chairman and CEO Tony Moncupa, when asked for income guidance, previously said that “… we will be sad if our 2017 income is less than P4.25 billion, or 25 percent better versus the P3.4 billion we booked in 2016…” 

“It now appears that we will not be sad.  Income growth will likely be higher than 25 percent.  Based on the first half 2017 results and the trajectory of our businesses, we have a chance to end 2017 with above industry average return on equity.  We are now looking at 2017 full year income of at least P4.8 billion,” Moncupa said. 

Total assets on the other hand grew 20 percent to P310 billion driven by the growth in the bank’s loan portfolio.

Total loans increased 19 percent to P212 billion, led by the 34 percent growth in consumer loans.  

Consumer loans account for 71 percent of the bank’s total loans. 

The consumer focused universal bank maintained its industry leading net interest margin of 7.8 percent.  

The bank also reported that its net interest margin net of provisions for loan losses, a metric that makes comparison among banks more meaningful, was at 6.1 percent. 

Net interest margin net of provisions for loan losses of listed universal and commercial banks was at 3.3 percent in 2016.  

Meanwhile, deposits stood at P255 billion, 24 percent higher versus the same period in 2016.

“The bank’s operating leverage continues to improve as we complete our store expansion program.   Our businesses, particularly consumer loans and deposits, continue to post robust growth.  On the other hand, credit costs tapered off as asset expansion were more on secured and lower credit cost sectors,” said EW President & Deputy CEO Bobby Reyes.   

Net revenues increased by 16 percent to P12.1 billion year-on-year even as net revenues before trading income was 25 percent better. 

EastWest reported that its total trading revenues declined by 71 percent from P918 million in the first half of 2016.  Operating expenses on the other hand increased by 14 percent to P6.5 billion. 

“Our first half trading revenues was not as good as we hoped.  We are happy though that our core recurring income has more than made up for the lower trading revenues.  Our core revenues are improving at double the pace of the increase in operating expenses,” Reyes added.

The bank reported that its return on equity improved to 14.1 percent from 9.8 percent in 2016. Its return on assets on the other hand was at 1.7 percent compared to the 1.3 percent booked last year. 
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