EastWest Bank profit down 21% in 9 months

MANILA, Philippines – Profits of East West Banking Corp. fell 21 percent in the first nine months due to lower trading income as well as higher provisions.

Antonio Moncupa, president and chief executive officer of EastWest Bank, said the nine-month results are much lower due to lower trading income and higher provisions but noted the bank’s core deposits and consumer businesses “are growing quite handsomely.”

 “We believe the worst cost impact of our massive branch store expansion is now behind us and we are hopeful to still end the year with a higher income than last year’s P2.1 billion,” he said.

The bank’s net income amounted to P1.3 billion from January to September, P340 million lower compared to the P1.64 billion booked in the same period last year.

Its gross revenues grew 8.8 percent to P11.91 billion in the first nine months from P10.94 billion in the same period last year, while expenses jumped 16 percent to P10.25 billion from P8.84 billion.

The bank’s trading and securities gains fell 61 percent to P243.3 million from P620 million, while earnings from foreign exchange trading went up 18.4 percent to P163.45 million from P138.04 million..

The bank reported its net interest income increased 23 percent on the back of the 34 percent surge in higher yielding consumer loans and the 12 percent rise in corporate loans to P140.8 billion as of end September.

 “While the financial markets are difficult and the consumer loans are always costly in terms of first two year provisioning, we believe we are at a good place,” Moncupa said.

The rise in the bank’s operating expenses was traced to the 35.7 percent jump in provision for impairment and credit losses to P3.08 billion in the first nine months from P2.27 billion in the same period last year.

EastWest Bank’s total assets surged 28 percent to P213.5 billion as of end September, while total capital surged 46 percent to P30.6 billion.

 “EastWest now has one of the biggest branch store networks, we have the capital we need, and most important - the momentum of growth,” Moncupa said.