In a recent disclosure to the Philippine Stock Exchange (PSE), China Banking Corp. reported that it has registered a net income of P14.7 billion in the first nine months of 2022, a 31 percent increase from the P11.2 billion it earned in 2021.
The bank said its nine-month net income was driven by higher top-line revenues and core fee income, which resulted in a better return on equity and return on assets at 15.6% and 1.6%, respectively.
Net interest income also picked up by 17 percent to P33.7 billion amid a higher volume of earning assets, which offset higher interest expense due to rate hikes here and abroad.
Given this, the bank’s net interest margin was maintained at 4.2 percent.
As of end-September, its fee-based income improved by six percent to P8.3 billion, buoyed by continued recovery in core revenue streams, including service charges, fees, and commissions, income from the sale of acquired assets, and bancassurance.
China Bank’s total assets stood at P1.3 trillion during the period.
“This performance demonstrates our strong business franchise and focused growth strategy. We will continue to efficiently use our resources to fuel the bank’s growth, support our customers, and further drive economic recovery,” said William Whang, President of China Bank, in a press statement.
Strong demand for corporate and consumer loans
According to Patrick Cheng, chief finance officer of China Bank, the bank enjoyed a stronger demand for corporate and consumer loans, causing a 14 percent increase in gross loans to P697 billion.
“While there is a continuous demand for loans, growth for the third quarter has been more measured in light of the current macroeconomic conditions,” Cheng said.
China Bank also reported that as an effect of elevated domestic inflation and the continued weakening of the peso against the dollar, its operating expenses also rose by eight percent to P18 billion.
This development also further pushed up China Bank’s transaction-related costs and technological capital expenditures, which resulted in improved efficiency with a cost-to-income ratio of 43 percent.
China Bank’s gross non-performing loans (NPL) ratio decreased to 2 percent from 3.4 percent. The bank raised its credit provisions by 7 percent to P6.9 billion for an NPL coverage of 161 percent, which is well above the regulatory and industry standards.