China Bank nets P6.45B in 2016, up 15%

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CHINA Banking Corp., the listed affiliate bank of the SM Group, reported double-growth in net income last year on the strong performance of all its business segments.

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In a statement on Monday, China Bank said its net income expanded to P6.45 billion in 2016, up 15 percent from the previous year, translating to a 10.4 percent return on equity and 1.16 percent return on assets.

“Our 2016 results reflect the teamwork and dedication of everyone in the China Bank group to achieve significant growth in the major market segments—corporate, middle market and entrepreneurs—where we are traditionally strong and establishing a stronger presence in the consumer segment, and more recently in the capital markets,” China Bank President and Chief Executive Officer Ricardo R. Chua said.

Net interest income grew 11 percent to P16.69 billion, driven by a 12.5 percent increase in interest revenue from loans to P17.89 billion.

Its loan book grew 24 percent to P393.74 billion, led by a 27 percent growth in consumer loans. Total deposits expanded by 23 percent to P541.6 billion on the back of a 21 percent increase in low-cost checking and savings accounts (CASA) deposits to P276.4 billion.

Fee-based revenues rose 14 percent to P5.09 billion on robust trading gains of P918 million and revenue growth from service charges and fees, trust fees, and gains on the sale of acquired assets.

Meanwhile, operating expenses increased by 7.9 percent as the bank continued to expand its branch and distribution network.

Total assets climbed by 20 percent to P633.2 billion. Total capital funds hit P63.37 billion, resulting in healthy capital ratios, with common equity tier 1 (CET 1) at 11.30 percent and total capital adequacy ratio (CAR) at 12.21 percent.

Chua said the bank is in a position to reach new highs this year given the profitability of thrift bank arm China Bank Savings (CBS), the formation of its new investment banking arm China Bank Capital Corp. (CBCC) and its expanded branch network.

“We mark the 10th anniversary of our network expansion triggered by the acquisition of Manila Bank (renamed China Bank Savings), which saw our network more than triple from 148 branches to 541,” Chua said.

“We also mark the 10th anniversary of our Manulife bancassurance partnership through the Manulife China Bank Life Assurance MCBL, now a major contributor in fee-based revenues,” he added.

China Bank plans to raise P15 billion from a stock rights offer scheduled in May this year to support its growth strategies.

Founded in 1920, China Bank is the country’s first privately owned local commercial bank and is now the sixth largest private universal bank in terms of assets. As of end-2016, China Bank was operating 541 branches nationwide, including 150 CBS branches.

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