The earnings of East West Banking Corp. led by bankero Tony Moncupa fell by 31 percent to P4.5 billion last year from P6.5 billion in 2020 from the impact of lower loan levels, credit card rate cap and normalized trading gains.
The revenues of the Gotianun-led bank declined by 19 percent to P27 billion from P33.4 billion primarily due to lower net interest income and trading gains.
EastWest Bank chief lending officer Jackie Fernandez said the COVID-19 pandemic hit the bank’s profitability rather hard.
The bank’s return on equity of 7.7 percent last year was within the range of the industry’s average from record levels between 2017 and 2020 and landing in the Top 3 for four consecutive years.
“We adopted a very measured lending stance that resulted to lower loan volumes. We believe we are largely done with the high loan loss provisions and now that the light at the end of this long pandemic tunnel is finally in sight, we are looking forward to making up for lost ground,” Fernandez said.
EastWest Bank maintained its industry leading net interest margin at 6.6 percent in 2021 from 8.1 percent.
The bank’s net interest income fell by 20.7 percent to P21 billion from P26.5 billion due to lower volumes of auto loans, mortgage, and personal loans compared to pre-pandemic levels.
According to the bank, the slow recovery of consumer loans in the industry affected EastWest as 70 percent of its loan book comprise of retail loans.
Fees and commission income remained flat at P3.7 billion while trading gains plunged by 65 percent to P1.9 billion.
The operating expenses of EastWest Bank inched up by two percent to P16.5 billion from P16.2 billion on the back of strategic investments on technology and digital offerings.
The bank’s provisions for loan losses dropped by 58 percent to P4.1 billion last year from P9.8 billion in 2020.
“We believe that pandemic-induced elevated loan losses are largely accounted for and we expect lower loan loss provisions on the existing portfolio in 2022,” Fernandez said.