CHINA Banking Corp., a listed affiliate of the SM Group, said its consolidated net income grew 10 percent last year to P5.63 billion from P5.11 billion in 2014.
In a disclosure to the Philippine Stock Exchange (PSE), the bank said the earnings expansion last year was due to sustained growth in its core business operations.
The net income translates to a return on equity of 9.69 percent and a return on assets of 1.18 percent.
Net interest income grew 7 percent to P15.08 billion, largely due to earnings from loans and receivables that grew 8 percent to P15.90 billion, while interest expenses dropped 2 percent to P4.24 billion. The bank said this led to an improved net interest margin of 3.37 percent from 3.30 percent.
Net loans rose 7 percent to P309.81 billion, driven by the strong growth of consumer and commercial loans, which increased 24 percent and 11 percent, respectively, offsetting the flat growth in corporate loans, it said.
Non-interest income fell 4 percent to P4.56 billion as trading gains and income from sale of investment properties declined by 9 percent to P486.92 million and by 27 percent to P258.71 million, respectively.
The drop in non-interest income was offset by the 25 percent increase to P1.95 billion in earnings from service charges, fees, and commissions from its bigger network and contribution from the remittance and investment banking businesses.
Total operating income reached P19.64 billion, up 4 percent.
The bank said that as it continued its investments in branch expansion, automated teller machines, technology upgrades and manpower, consolidated operating expenses (excluding provision for losses) grew slightly by 5 percent to P12.3 billion, resulting in a cost-to-income ratio of 62.62 percent.
China Bank also reported that it maintained a strong balance sheet in 2015, with total assets expanding by 12 percent to P526.54 billion, driven by loans and investments supported by deposit growth.
The bank’s total deposits went up 10 percent to P439.10 billion, supported by the 18 percent growth in low-cost deposits (demand and savings accounts) to P227.37 billion, which led to a better low-cost deposits to total deposits ratio of 51.78 percent from 48.39 percent last year. The loans-to-deposit ratio stood at 71 percent
Total capital funds increased by 5 percent to P59.31 billion. The bank’s common equity tier 1/ Tier 1 and total capital adequacy ratios stood at 12.58 percent and 13.50 percent, respectively.
China Bank said it had one of the fastest branch expansions in 2015 after it opened 47 branches–38 for China Bank and nine for China Bank Savings–of which 22 branches were in restricted areas and 25 branches were in non-restricted areas.