EastWest Bank books 21% income hike in H1

MANILA, Philippines — Gotianun-led East West Banking Corp. booked a 21 percent increase in earnings to P2.7 billion in the first half from P2.2 billion in the same period last year mainly due to higher fees and commissions, higher trading gains and lower credit costs.

Jesus Roberto Reyes, president and deputy chief executive officer of EastWest, said the listed bank expects better results in the second half after its margins were squeezed in the first quarter due to tight liquidity and higher funding costs.

“We are slowly seeing improvement on this and anticipate a better second half for 2019,” Reyes said.

The bank’s net interest margin (NIM) improved to 6.5 percent in the second quarter from the previous quarter’s 6.4 percent and remained higher than the industry’s 3.6 percent.

Reyes explained EastWest’s above industry NIM is due to its unique consumer loan mix comprising 72 percent of its total loan portfolio, the opposite of most big banks.

“For the second half of 2019, we anticipate our net interest margins to recover as the liquidity situation improves and interest rates to normalize” he added.

The bank reported a return on equity (ROE) of 12.3 percent, while its total assets jumped by 22 percent to P389.5 billion.

For the first semester, revenues of the country’s 11th largest lender in terms of assets reported an eight percent rise to P13.2 billion from P12.2 billion due to higher non-interest income.

Income from fees and commissions surged by 30 percent to P2.7 billion, while securities and foreign exchange trading gains soared by 188 percent to P629.5 million.

Operating expenses excluding provisions for losses, meanwhile, inched up by nine percent to P7.9 billion, mainly due to business related expenses and intensified marketing acquisition campaigns to generate more loans and retail deposits.