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China Banking Corp. posted single-digit drop in net income growth in
the first quarter of the year despite robust growth in consumer
lending.
In a statement, China Bank said its net income
grew 7 percent to P703 million in the first quarter of the year.
This translates to a 10.56-percent return on equity and a
1.60-percent return on assets.
The bank has incurred higher expenses as it
aggressively expanded its branches and processed the integration of
Manila Bank Corp.’s branches into its operation.
China Bank acquired Manila Bank last year and
completed its integration in February this year, bringing its total
branches to 198 from the original 17. The bank targets to open 58
more branches around the country this year and expand to 300
branches in 2010.
The bank’s total revenues posted a modest
growth of 4 percent year on year to P3.43 billion as of end-March.
The bank reported its operating expenses grew 11 percent, but did
not disclose the actual amount.
Its consumer loan business performed well during
the period, with consumer lending propelling interest income to grow
13 percent year on year during the first quarter. Total loans grew
14 percent driven by consumer lending growth of 43 percent during
the period.
To further expand the bank’s assets, its board
yesterday approved the issuance of P8-billion long-term negotiable
certificates of time deposit (LTNCD). Alexander Escucha, head of
China Bank’s Corporate Information Center, said the issuance would
expand the issuer’s long-term deposit base and support the
bank’s long-term asset growth.
The bank has embarked on a continuous program to
relocate and renovate branches to bigger and better sites as well as
to expand market coverage through electronic touch points such as
ATMs.
Total capital funds reached P26.8 billion,
translating to a capital adequacy ratio of 14.59 percent.
The bank’s total resources reached P177.41
billion in the first quarter this year, 7.6 percent higher than
end-March last year. Low-cost deposit funds likewise continued to
expand this year, with CASA ADB growing 14 percent compared with
last year.
China Bank also continues to beef up its
remittance network, recently forging alliances with the leading
banks in Saudi Arabia, the National Commercial Bank and Samba
Financial Group, to strengthen its presence in the Middle East.
-- Maricel E. Burgonio
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