China Bank nets P12B; assets hit P1T

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    China Bank’s total assets as of end-2020 stood at P1.04 trillion, up 8 percent.

    China Banking Corporation (China Bank) concluded a challenging year with P12.1 billion net income, 20 percent higher compared to 2019. The bigger profits translated to an improved return on equity of 12.1 percent from 11.0 percent, and a better return on assets of 1.2 percent from 1.1 percent.

    The strong growth in 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 surged by 30 percent to P33.8 billion on the back of the 39 percent drop in interest expense, resulting in higher net interest margin of 3.92 percent.

    Non-interest income grew by 19 percent to P10.0 billion, lifted by trading and securities gains which expanded more than double in 2020 to P5.4 billion.

    Sustained efforts in cost management kept the growth of operating expenses controlled at 6 percent to P21.5 billion. Cost-to-income ratio improved to 49 percent from 59 percent 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.”

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

    Deposits increased by 8 percent to P835 billion, underpinned by 14 percent 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 percent.

    The bank’s successful fund raising 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 last February 18, 2021.

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

    Consumer loans grew 7 percent, accounting for 20 percent of the total loan portfolio. Non-performing loans ratio rose to 2.3 percent, in line with the Bank’s expectations, but NPL cover remained sufficient at 128 percent.