Chinatrust passes full-year income target in 9 months

Chinatrust (Philippines) Commercial Bank Corp. (Chinatrust Phils.) has passed its full-year 2002 net income target with three more months to spare. For the first nine months this year, Chinatrust registered a net income of P373 million up by P3 million over its full-year target of P370 million and 104-percent better than last year’s.

"Hefty trading gains, a steady stream of net interest margin and tight management of portfolio quality accounted for this improved performance," Joey Bermudez, president of Chinatrust Phils. said.

The bank turned in an average return on equity of 15.81 percent and a return on assets of 3.07 percent. Likewise, the ratio of its operating expenses to revenues was registered at 41 percent considered among the best in the industry.

Bermudez said they have a non-performing loans (NPL) ratio 3.7 percent among the lowest in the industry. The industry average is 17.5 percent. Chinatrust Phils. also set aside the equivalent of 86 percent of its NPLs for loan-loss provisioning.

The bank has total resources of P16.39-billion, driven mainly by the 17-percent expansion of its net loan portfolio. Short-term funds and marketable securities however declined by P1-billion or 18-percent higher than its end year 2001 level "as the bank sold part of its bond portfolio to take advantage of profit opportunities in the market."

By the middle of the year, Chinatrust Phils. has total loans of P9 billion, or better than a billion pesos as of end 2001.

Among its biggest gains were the gains earned or expected from its housing loan program. It received bookings amounting to P600 million at the start of the second semester of the year. Bank officials expect this to reach P1 billion by yearend.

"Our home loan product is doing very well and we are introducing more exciting products in the next months. These give us a reason to be optimistic for the rest of the year," Bermudez said.

In the first six months, the bank outperformed Deutsche Bank and Citibank in terms of good ROE performance. Only the Hongkong and Shanghai Bank Co. (32.63-percent) and JP Morgan Chase Bank (30.97-percent) did better.

Recently, Chinatrust acquired the personal loan portfolio of ABN AMRO. The sale compliments the divestment efforts of ABN AMRO to focus on its core business of investment banking while it benefits Chinatrust increased emphasis on consumer banking.

The Taipei-based bank is looking to increase its consumer banking product to account for 60 percent of its banking activities mix while its corporate and institutional banking activities would account for the balance of 40-percent.