EastWest Bank reported a 38 percent year-on-year fall in net income for the first quarter of the year to P455.7 million as a result of lower trading gains during the period.
On Thursday, the bank said its net income declined because of the P756-million drop in trading income.
“The bank was not spared by the industry-wide decline in trading gains as interest rates started to move higher and volatility increased in both fixed income and currency markets,” it stated.
However, lower trading revenues were offset by the strong gains in its core banking businesses wherein consumer loans increased by 37.1 percent to P102.0 billion. Both corporate and consumer lending businesses posted double-digit growth of 47.8 percent and 28.4 percent, respectively.
EastWest Bank has the highest proportion of consumer loans among universal banks, with 52 percent of its loan portfolio in the consumer sector.
Total deposits stood at P122.9 billion, growing by 41.8 percent as compared to the same period last year, with low-cost deposits (current accounts and savings accounts) growing by 50.5 percent on account of its expanded branch network.
The bank also maintained its industry-leading net interest margin of 8.0 percent for the first three months of the year, driven by its significant consumer portfolio and improvement in its funding costs.
Net interest income increased by 23.7 percent to P2.3 billion, as interest income grew by 14.5 percent while interest expense declined by 23.9 percent, even as total deposits were 41.8 percent higher.
The bank’s non-interest income, excluding trading, went up by 22.9 percent to P800.1 million which largely came from recurring fee-income, driven by the growth in consumer loans, business and transactional income from the branches, it said.
Total operational expenses, including provision for loan losses, remained flat at P2.9 billion, while the bank’s expenses would have increased by double digits if the higher than normal expenses booked last year were taken into account, it said.
The bank opened 178 branches in 2012 and 2013. EastWest opened another 29 new branches this year bringing its total network to 376. The bank expects to end the year with total branches of at least 400.
EastWest’s annualized return on assets and return on equity stood at 1.2 percent and 9.3 percent, respectively, for the first quarter of 2014. Its total assets also went up by 29.6 percent to P153.8 billion compared to the same period last year.The bank’s capital adequacy ratio and Tier 1 were 12.2 percent and 11.3 percent, respectively.