China Bank: Solid profitability with disciplined growth
From AB Capital's The Opening Bell: Three Moves
Event
4Q25 net income reached P7.7 billion, +20% YoY and +8% QoQ, which takes its FY25 total to P28.0 billion, +13% YoY. This is in-line with expectations, accounting for 101% of street and AB Cap’s 2025E.
View
Loans grew 13%. NII +14% as margin performance remained strong, with NIM improving to about 4.6% for the year. NIMs expected to be stable with modest upside from lower funding costs. Loan growth seen at high single-digit.
Catalyst
Opex increased 12% as CBC continued investing in digital infrastructure, systems, and human capital. But cost efficiency remains relatively strong with the CIR improving to 45%. Credit costs are guided around 40bps with stable NPL picture.
Action
Maintain OUTPERFORM. With solid capital buffers, improving deposit mix, and consistent mid-teens ROE (15.6%, highest in our coverage), we view the riskreward as balanced and supported by stable profitability.
Disclaimer: The information, analyses, and views contained herein is based on sources which we, AB Capital Securities, believe are reliable, but is not guaranteed by us and is not to be considered all inclusive. It is not to be construed as an offer or solicitation of an offer to sell or buy the securities herein mentioned. AB Capital Securities and its Directors and Officers and/or members of their families may have a position in the securities herein mentioned and may make purchases and/or sales of the securities from time to time in the open-market and otherwise.
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