EastWest nets P6.5B; records 12.3% ROE

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    Gotianun-led EastWest Bank (EW) posted a Net Income of P6.5 billion in 2020, 4 percent higher from the previous year’s P6.2 billion. Return on Equity (ROE) was at 12.3 percent. Total Assets at P408.2 billion, were almost flat from 2019’s P406.3 billion.

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

    “While the bank has been among the top 3 most profitable universal banks in the last four years, the prospect of a ‘five-peat’ is uncertain for 2021. The shifting contours of the coronavirus pandemic make it difficult to pin down a 2021 income guidance. Fortunately, the Bank with its higher capital buffers and the loan loss provisions in 2020 is in a good position to face the remaining pandemic challenges and the rebuilding that will follow the vaccines”, Moncupa concluded.

    EW’s Net Revenues rose by 16 percent to P33.4 billion from the previous year. Net Interest Income was at P26.5 billion, 23 percent higher than 2019, mainly due to lower funding costs. The bank sustained its industry leading margins, with Net Interest Margin (NIM) at 8.1 percent.

    Total Provisions for Loan Losses were at P9.8 billion, 2.4x higher from last year’s P4.0 billion and stood at 4 percent of total Loans.

    Non-interest Income, on the other hand, decreased by 5 percent to P6.9 billion mostly accounted by the decline in Fees and other income due to the pandemic induced slowdown in business activities, the Bayanihan Act, and assistance to customers. The Bank booked a P2.7 billion ‘modification loss’ or the value of the assistance given to loan borrowers over the life of their loans that arose from the mandated and bank initiated cashflow relief programs.