EastWest Bank sees 25% hike in income this year

MANILA, Philippines - EastWest Banking Corp., the banking arm of the Gotianun family, expects a 25 percent increase in income this year as it sees higher earnings from fees and trading transactions.

In an interview on the sidelines of the bank’s first stockholders’ meeting, EastWest president Antonio Moncupa Jr., said they also expect resources to grow the same level as its profits.

EastWest Bank raised around P5 billion through an initial public offering (IPO) and listed in the stock exchange in mid-2012.

“For this year, we expect our total resources and profits to increase by around 25 percent. (Drivers of growth) would be the old fashioned loans and deposits. We expect deposits to continue grow and we expect to continue making good profits from fixed income and foreign exchange trading,” he said.

Last year, the bank increased its net income five percent to P1.8 billion from P1.7 billion in 2011.

Out of its P9 billion revenues  in 2012, about P1.5 billion accounted for trading gains.

Moncupa said loan growth for 2013 is seen at around 25 percent for both corporate and consumer segment.

The bank’s loan portfolio expanded 48 percent to P71 billion in 2012, with corporate loans rising 54 percent to P34.5 billion.

Deposits in 2012 grew 19 percent to P91 billion, mainly driven by low-cost funds as EastWest Bank expanded its branch network nationwide.

Moncupa also said they have no immediate plans of raising additional capital.

“If ever, it (capital raising scheme) would be towards the end of the year. We might issue preferred shares, however, we haven’t planned it yet,” he said. “We don’t see the need given our current common equity based on normal trajectory but we will not discount the opportunity that will come our way. Given the organic way, I don’t think we will need to raise common equity.”

The income growth expectation, Moncupa said, would be supported by the bank’s aggressive expansion program this year.

The bank intends to put up 75 to 100 additional branches this year and will spend about P6-8 million for each branch.

Most of these new branches, Moncupa said, would be located in Metro Manila.

He said they would also set up a total of 30 branches in Cebu and Davao to beef up presence in the countryside.

EastWest Bank opened 123 branches in 2012, bringing its total branch network to 245, up from 122 in 2011. It targets to have 350 branches by 2014.