Chinabank profit drops 25% in H1

MANILA, Philippines - China Banking Corp. has reported a 25-percent drop in consolidated net earnings in the first semester of 2014 to P2.2 billion, from P2.96 billion in the same period last year.

“Profits fell 25 percent against the same period last year amid lower trading gains,” the bank said in a statement.

But total operating income grew 43 percent due to the strong performance of loans and deposits.

Net interest income rose 53 percent to P6.79 billion due to a loan volume increase of 42 percent, along with a nine-percent drop in interest expense on deposit. Net interest margin improved to 3.18 percent from 2.86 percent in the same period last year.

Non-interest income dropped 43 percent to P1.96 billion as a result of reduced reliance on securities trading.

Total consolidated assets expanded 32 percent to P457.4 billion. Net loans likewise grew 42 percent to P264 billion.

The bank’s deposit base grew 34 percent to P387.68 billion, buoyed by the 45 percent expansion of low-cost deposits that reached P176.9 billion. Thus, loan-to-deposit ratio improved from 64 percent to 68 percent.

Asset quality was maintained as net non-performing loans (NPLs) ratio still was at 1.01 percent.

Total capital funds stood t P55.28 billion, including the P8 billion raised from its stock rights offering in May, with a return on average equity of 9.08 percent. Capital adequacy ratio (CAR) stood at 16.24 percent, while common equity Tier 1 ratio is at 14.78 percent.

Last year, China Bank’s net earnings amounted to P5.10 billion.

The universal bank, a member of the SM Group of Companies, operates 301 branches, excluding 76 China Bank Savings and 78 branches of the newly-acquired Planters Development Bank.