The Board of Directors of China Banking Corporation (China Bank) declared P1.00/share regular dividend and an additional P0.50/share special dividend, reflecting China Bank’s confidence in its underlying strength and future prospects.
The total cash dividends of P4.04 billion is 50 percent higher compared to the P2.69 billion dividends paid last year and translates to a better cash dividend yield of 5.6 percent based on the bank’s closing price of P26.70 as of May 4, 2022.
The cash dividends represent 27 percent of the full year 2021 net income of P15.1 billion.
The dividends will be paid on June 3, 2022 to stockholders on record as of May 20, 2022.
The bank recorded net profits of P4.9 billion in the first quarter of 2022, 37 percent more compared to the same period last year.
The improved profitability, driven by sustained core business growth, yielded a higher return on equity of 16.0 percent and a better return on assets of 1.7 percent.
As the Philippine economy continues to recover from the Covid-19 pandemic, China Bank’s net interest income rose 15 percent year-on-year to P10.8 billion on the back of higher earning assets and lower interest expense. Net interest margin further improved to 4.3 percent. Meanwhile, lower trading gains compressed fee-based income to P1.7 billion, despite an 18 percent increase in service charges, fees, and commissions and a 22 percent jump in trust fees.
“China Bank’s organic growth momentum continues–loans and deposits are up, expenses are down, and credit quality remains solid,” China Bank President William C. Whang said.
Provisions for credit losses were reduced by 65 percent to P780 million, reflecting an improved macro-economic outlook. The resulting non-performing loan (NPL) coverage was higher at 119 percent.
Prudent cost management led to an 8 percent drop in total operating expenses, further improving the cost efficiency ratio to 46 percent.
The bank’s total assets expanded 12 percent to P1.1 trillion. Asset quality remained healthy as NPL ratio was maintained at 2.5 percent as of end-March 2022, still lower than industry average.
“Our effective asset-liability management and solid capital structure have allowed clients to access our balance sheet and enabled us to achieve better-than-industry growths in assets, loans, and equity. Moreover, the growth of CASA deposits continued to improve our funding cost,” China Bank Chief Finance Officer Patrick D. Cheng said.
