Taguig—(PHStocks)—The Gotianun-led East West Banking Corp. (EastWest Bank, PSE: EW) recently disclosed its 2013 full-year net income at PhP2.1 billion, higher by 13.2% on the back of growth in its core businesses.
With its revenue growth, the bank reported its return on equity (ROE) and return on assets (ROA) at 11.1% and 1.6%, respectively. EastWest’s total assets was at PhP142.3 billion, up by 17.2% vs. 2012’s PhP121.4 billion.
Core Businesses Drive Bottom-line
Despite the challenging 2013 landscape, EastWest posted strong performance in its core businesses of loans and deposits. Customer loans registered a 32.1% increase to PhP95.6 billion. Consumer loans grew by 29.4% to end the period at Php48.9 billion. Credit cards, auto, mortgage and personal loans businesses all posted healthy double-digit growth from previous year. Furthermore, corporate loans at the end of the year was at PhP46.7 billion, up by 35.1% from previous year.
EastWest registered total deposits of PhP111.2 billion, an increase of 21.9%, driven by the expanded branch store network. Low-cost deposits (CASA) grew by 27.9% while high-cost deposits increased by 14.4%. The bank improved its low-cost deposits to total deposits ratio that resulted in the decrease of interest expense by 15.3% year-on-year.
In 2013, EastWest opened a total of 55 new branch stores to end the year at 300. As of 17 March 2014, the consolidated branch store network of EastWest Unibank and EastWest Rural Bank was at 369.
The bank registered its highest net interest margin of 8.4%, on account of its above industry loan growth that resulted in net interest income increase of 37.9% year-on-year.
Other Income growth and Expenses
Fees, commissions and other non-interest income grew by 29.1% to PhP4.77 billion. Revenue from fees, excluding trading income, rose by 39.2% to PhP3.1 billion year-on-year.
Total expenses for the period was 39.8% higher at PhP10.9 billion as it continued to expand its branch store network and continue to gain market share in consumer loans for the year. The bank’s Capital Adequacy Ratio (CAR) and Tier 1 Ratio stood at 17.0%and 13.8%, respectively as of year-end 2013.
“The year 2013 proved to be a challenging one for the banking industry in general because of the ultra low-interest rate environment. Other banks turned their focus on traditional income sources, which tightened competition. In spite of this, we are pleased with our core businesses growth as well as our overall financial results. Our branch store expansion is on track and we are set to open more branch stores this year. The cost of expansion will continue to impact on our short term results but we are confident on the long term benefits of our investments as we continue to execute our strategy and we will continue to ride on the momentum we have gained since we started our expansion program,” said EastWest Chief Finance Officer Rene K. De Borja Jr.
EastWest is a subsidiary of the Filinvest Development Corp. (PSE: FDC), one of the largest and well established business conglomerates in the Philippines. FDC, established in 1955, is identified with the Gotianun family and aside from banking, its business interest include real estate, sugar, hospitality and tourism, and power generation.