The aggressive network expansion of EastWest Banking Corp. has driven its profit further during the first nine months of the year, even bringing the number of its branches closer to target.
EastWest reported to the local bourse on Wednesday that it recorded a net income of P1.7 billion for the first nine months of the year, 28 percent higher from 2012, which translates to a 12.6 percent and 1.8 percent in return on equity (ROE) and Return on Assets (ROA), respectively.
“Our core businesses continue to grow. Clearly, we are feeling the cost of our branch store expansion. We expect the full cost impact in 2014. While this somehow depresses ROE and ROA this year and next [year], we remain convinced it will be value enhancing in the future and will put EastWest among the list of major Philippine banks,” Antonio Moncupa Jr., EastWest president and chief executive officer, said.
According to the company’s financial report, the bank’s strong net income growth was bolstered by the healthy performance of its core businesses of loans and deposits.
EastWest’s total loans registered a 40.6-percent increase to P89 billion, while deposits grew by 37.4 percent to P95.2 billion.
As of October 31, 2013, EastWest’s total branch store network was at 347 including that of its rural bank subsidiary.
EastWest started a major branch expansion program in 2012 where it planned to bring its total network of branch stores to around 400 by the first quarter of 2014, from 122 in 2011.
Also, the bank’s Capital Adequacy Ratio (CAR) remains more than adequate at 17.1 percent as of the third quarter of the year, while its Tier 1 ratio stood at 13.8 percent. EastWest earlier announced plans to offer P10 billion of Basel 3 eligible securities in the form of Additional Tier 1 (AT1) and/or Tier 2 capital, subject to regulatory approvals.
Total assets of EastWest was at P127.4 billion, up by 30.7 percent compared to the same period last year.