• China Bank, DBP post hefty third-quarter profit growths

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    China Banking Corp. is on track with its growth targets for the year as it posted P3.93 billion in consolidated net income for the third quarter of 2013.

    Meanwhile, state-owned Development Bank of the Philippines’ (DBP) registered a P4.04-billion net income as of the end of the third quarter of 2013.

    In a statement, China Bank said that its consolidated net income was 25 percent higher compared to the P3.14 billion earnings it recorded during the same quarter a year ago.

    “This translates to a return on average equity of 11.78 percent and return on average assets of 1.55 percent,” it said.

    “We are pleased with the strong underlying growth in our core businesses and the continued success of our other revenue streams,” said Peter Dee, China Bank president and chief executive officer.

    Meanwhile, as its net interest income and fee and commission income improved, China Bank’s total operating income for the period grew 18 percent to P11.47 billion compared to a year earlier.

    Higher earnings from loans and an expanded low-cost deposit base drove the bank’s net interest income to jump 17.6 percent to P7.08 billion at the end of the third quarter. Noninterest income rose 18.6 percent to P4.38 billion as the bank recorded higher trading gains, which grew 11.8 percent to P1.92 billion.

    On the other hand, China Bank said that it has kept operating expenses at a manageable level, which recorded a 12.4-percent increase despite its continued network expansion and technology upgrades both for the main bank and the savings bank.

    DBP net income
    In a statement, DBP said that its net income “improved” by 39.79 percent compared to the P2.89 billion recorded during the same period last year.

    It noted that its higher net income was a reflection of the country’s strong economic performance and favorable market conditions.

    The bank’s gross income, on the other hand, reached P14.52-billion as of the end of September this year. It improved by P1.78 billion from P12.74 billion during the same period in 2012.

    Its deposit levels were recorded at P222.84 billion this year from the P129.3 billion registered last year, representing an increase of 72.26 percent.

    DBP’s total assets also went up to P392.79 billion from P313.9 billion last year, or an improvement of 25.13 percent.

    “The bank remains consistent in its efforts to support the government’s national development thrusts, channeling much-needed financial facilities to strategic sectors such as infrastructure and logistics, environment protection, social services involving health care, education, housing and community development, and micro, small and medium enterprises,” it stated.

    DBP noted that to beef up its various developmental initiatives, the bank is in the process of issuing P5-billion Basel III compliant unsecured subordinated notes qualifying as Tier 2 capital, with the option to upsize. The Tier 2 unsecured subordinated notes to be issued will mature 10 years from the issuance date.

    Said issuance will replace the P6.5-billion (non-Basel 3) Unsecured Subordinated Debt qualifying as Lower Tier 2 Capital (UnSD-LT2) called in September.

    On September 2, the bank exercised its call option on the P6.5-billion UnSD-LT2 that the bank issued on September 1, 2008, with a coupon rate of 7.75 percent per annum.

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