East West Bank participates in $20-M trade facility bandwagon with HSBC, IFC

East West Banking Corp. (East West Bank) has been selected as one of two banks in the Philippines to participate in the $20 million Philippine Trade Facility (PTF).

The selection was formalized through the signing of the tripartite framework agreement between Hongkong Shanghai Banking Corp. (HSBC), the International Finance Corp. (IFC) and East West Bank.

The facility is aimed at providing medium-sized local commercial banks, that are active in import trade access to increased trade confirmation limits. Under the agreement, IFC will guarantee 40 percent of the incremental confirmation facility EWBC maintains with HSBC, with the latter covering the remaining 60-percent risk.

The trade enhancement program was developed by IFC and HSBC to assist medium-sized commercial banks secure higher credit limits for the issuance of confirmed letters of credit. IFC has entered into similar agreements with partner-banks in Bangladesh, Indonesia, Korea and Pakistan.

The PTF is the seventh trade facility put in place by IFC since 1997.

East West Bank’s growth potential in trade finance as reflected by its expanding trade volume in recent years was cited as the reason for the selection. Last quarter, EWBC finalized the acquisition of Ecology Bank, which will boost EWBC’s network of branches to 77.

As of the third quarter of 2002, the bank reported a net income of P117 million, representing a 153 percent increase from the P46 million it posted in the same period the previous year.

Bank resources grew to P15.2 billion, a 19.5 percent rise from September 2001, while traditional deposits improved by 18.7 percent to P10.3 billion from P8.7 billion posted also in September 2001.

Loan porfolio, on the other hand, expanded by 30 percent from P6.9 billion to P8.9 billion during the nine-month period.

East West Bank posted a net income of P117 million for the first nine months last year, representing a 153 percent increase from the P46 million it posted for the same period in 2001. The bank attributed the significant growth in net income to the improvement in resources.

As of Sept. 30, 2002, the bank’s resources grew to P15.2 billion, a 19.5-percent improvement from its P12.8-billion resources in 2001. Traditional deposits grew by 18.7 percent to P10.3 billion from 2001’s level of P8.7 billion, while total loan portfolio expanded to P8.9 billion from P6.9 billion in 2001, or an increase of 30 percent. The bank’ total capital as of the end of the third quarter last year stood at the P1.8 billion.

Established in 1994, East West Bank is the fastest growing commercial bank in the country today. At present, it has a total branch network of 47 branches nationwide. It is a subsidiary of Filinvest Group of Companies headed by Andrew L. Gotianun.