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October 01, 2023

Chinabank reports 7% rise in H1 net income to P10.8 billion

China Banking Corp. (Chinabank) has reported a 7 percent increase in net income, reaching P10.8 billion in the first half of this year, compared to the same period in 2022, resulting in a return on equity of 15.9 percent and a return on assets of 1.6 percent. The bank attributed this sustained profitability to higher revenues and decreased provisioning. Quarter on quarter, net income for the April to June period surged by 16 percent, reaching P5.8 billion from P5 billion.

Bankero Romeo Uyan Jr., President and Chief Executive Officer of Chinabank, attributed the strong results to their customer-focused approach and disciplined operational execution. Total revenues for the first half amounted to P27.2 billion, marking an 8 percent year-on-year increase. Net interest income also demonstrated robust growth of 16 percent, reaching P25.5 billion, driven by solid top-line growth that mitigated the impact of an increase in interest expenses.

Chinabank allocated P878 million for provisions for loan losses, representing a 47 percent reduction compared to the same period last year, reflecting the ongoing economic recovery. The bank’s nonperforming loan cover remained robust and above the industry level at 122 percent. Operating expenses increased by 22 percent, amounting to P13.6 billion, attributed to significant investments in human resource development, digital innovation, and higher volume and revenue-related taxes. Despite this, Chinabank emphasized that the cost-to-income ratio remained healthy at 50 percent.

Meanwhile, bankero and Chinabank Chief Financial Officer Patrick Cheng, highlighted the bank’s strong balance sheet, which now boasts an improved liquidity ratio of 45 percent. Cheng stated that this financial strength positions them well to capitalize on growth opportunities, provide sustainable returns to shareholders, and continue supporting customers and the broader economy.

Chinabank’s total assets registered a 15 percent growth, reaching P1.4 trillion, maintaining its position as the fourth-largest among private domestic banks. Net loans experienced an 11 percent increase to P726 billion, with stronger demand observed in both the consumer sector, which grew by 20 percent, and the business sector, which grew by 8 percent.

Despite the robust loan growth, asset quality remained stable, with the nonperforming loan ratio easing to 2.2 percent, lower than the latest industry average. Total deposits surged by 19 percent, reaching P1.1 trillion. However, the CASA (checking account savings account) ratio dropped to 49 percent due to growth in term deposits year on year.

Chinabank’s total capital reached P139 billion, reflecting a 9 percent increase, and featured a common equity tier 1 ratio and a total capital adequacy ratio of 15.2 percent and 16.1 percent, respectively—both surpassing the minimum regulatory requirement.


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