China Bank income slips

China Banking Corp. (China Bank) has reported a 9.4-percent decline in consolidated net profits to P2.2 billion in the first nine months of 2008 compared to the same period last year.

Net interest income declined 2.9 percent due to the industry-wide decline in net interest margins despite a healthy 22.9 percent year-on-year growth in lending, while non-interest income gained 15.6 percent.

Return on equity (ROE) stood at 11.7 percent while return on assets (ROA) was estimated at 1.6 percent. Capital adequacy ratio (CAR) remained a healthy 14.3 percent.

Interest revenues from loans grew 18.5 percent on the back of the continued 22.9 percent growth in the loan portfolio, with growth recorded across consumer, commercial and corporate lending sectors. Growth in non-interest income was realized despite the expected declined in securities trading gains by 13.7 percent due to unfavorable market conditions.

It was, however, more than offset by robust growth in other fee-based revenues such as trust fees, sale of acquired assets, service charges, fees and commissions. Volumes and revenues from new businesses such as cash management, private banking, remittances, and bancassurance continued to gain momentum.

Total consolidated resources stood at P193.3 billion, up 10 percent from the end-2007 level. Balance sheet strength continued to be solid, with the loan loss coverage at 92.5 percent. Total deposits reached P157.1 billion or 11.9 percent higher from end-2007 levels. 

China Bank, a member of the SM Group of Companies, successfully concluded a five-year P5-billion Long-Term Negotiable Certificate of Deposit (LTNCD) issue, which was oversubscribed.

It is likewise in the middle of a three-year branch expansion program with the integration of Manila Bank branches into its network, and the relaunch of savings bank subsidiary China Bank Savings in September.

China Bank continues to expand it distribution network, with 207 branches and 308 ATMs.– TPT