CHINA Banking Corp., affiliate bank of the SM Group, boosted its consolidated net income by 31 percent in the first nine months of the year, driven by the strong performance of its core and fee-based businesses.
In a disclosure to the Philippine Stock Exchange on Thursday, China Bank said net income from January to September this year increased to P4.84 billion from P3.69 billion in the same period a year ago, translating to a return on equity (ROE) of 10.47 percent and a return on assets (ROA) of 1.19 percent.
Total operating income rose 16 percent to P16.46 billion on strong growth in net interest income and non-interest fee-based incomes.
Net interest income improved 9 percent to P12.26 billion while net loans climbed 19 percent to P343.10 billion, benefiting from a 24 percent increase in consumer loans.
Total deposits expanded 21 percent to P472.77 billion, boosted by a 12 percent increase in checking and savings accounts (CASA) deposits to P244.44 billion. Of the total deposits, 51.7 percent were CASA deposits while the loans to deposit ratio was at 72.57 percent.
Non-interest fee-based revenues advanced 42 percent to P4.21 billion on a threefold rise in trading gains, doubled gains in asset incomes, and a 13 percent increase in service charges, fees and commissions.
“We are pleased to note that our core business drivers continue to show robust growth. These positive results indicate that we are on track to meet our business goals for this year, especially with the turnaround of our China Bank Savings subsidiary into a significant contributor to group profitability,” Ricardo R. Chua, China Bank president and chief executive officer, said in a statement.
Operating expenses increased 9 percent to P10.08 billion as the bank continued to strengthen its operations with new investments and more branches, ATMs, and human resource complement.
Total assets expanded 20 percent to P564.79 billion while total capital funds increased 10 percent to P63.85 billion.
Its common equity tier 1 (CET1) ratio and capital adequacy ratio stood at 12.40 percent and 13.32 percent, respectively.
During the third quarter, Fitch Ratings raised its long-term issuer default rating on China Bank to BB+ from BB.
The bank is set to issue P20 billion worth of long-term negotiable certificates of time deposits (LTNCDs) to support its strategic initiatives and business growth. The LTNCDs will be issued in tranches of P5 billion to P10 billion each, with tenors ranging from five to seven years.
Established in 1920, China Bank is an affiliate bank of the country’s wealthiest man, Henry Sy. It mainly caters to the small and medium enterprises (SME) market while also offering banking services to the corporate, commercial, and retail segments through its network of over 500 branches nationwide, which includes its thrift bank arm China Bank Savings.
To date, the bank has 526 branches, including 160 China Bank Savings branches nationwide.