Makati—(PHStocks)—China Banking Corp. (China Bank, PSE: CHIB) posted a full year consolidated net income of PhP5.63 billion in 2015, 10% higher than net income posted last year on the back of sustained growth in core business operations. This translates to a return on equity of 9.69% and return on assets of 1.18%.
Net interest income grew 7% to PhP15.08 billion, largely due to earnings from loans and receivables that grew 8% to PhP15.90 billion while interest expenses dropped by 2% to PhP4.24 billion. This led to an improved net interest margin of 3.37% from 3.30%. Net loans rose 7% to PhP309.81 billion, driven by the strong growth of the bank’s consumer and commercial loans, up 24% and 11%, respectively, which offset the flat growth in corporate loans.
Non-interest income fell 4% to PhP4.56 billion as trading gains and income from sale of investment properties declined by 9% to PhP486.92 million and by 27% to PhP258.71 million, respectively. This was offset by the 25% increase to PhP1.95 billion in earnings from service charges, fees, and commissions from the bigger network and contribution from the remittance and investment banking businesses. Total operating income reached PhP19.64 billion, up 4%.
Even as it continued its investments in branch expansion, ATMs, technology upgrades and manpower, consolidated operating expenses (excluding provision for losses) grew slightly by 5% to PhP12.3 billion which resulted to a cost-to-income ratio of 62.62%.
China Bank maintained a strong balance sheet in 2015. Total assets expanded 12% to PhP526.54 billion, driven by loans and investments supported by deposit growth. Total deposits went up 10% to PhP439.10 billion, supported by the 18% growth in low-cost deposits (Demand & Savings accounts) to PhP227.37 billion, which led to a better low-cost deposits to total deposits ratio of 51.78% versus 48.39% last year. The loans-to-deposit ratio stood at 71%.
Total capital funds increased by 5% to PhP59.31 billion. The bank’s CET 1/ Tier 1 and total capital adequacy ratios stood at 12.58% and 13.50%, respectively.
China Bank had one of the fastest branch expansions in 2015. It opened forty seven (47) branches (38 for China Bank and 9 for China Bank Savings), of which 22 branches were in restricted areas and 25 branches in non-restricted areas. The Bank also opened its BGC-One World Place branch, the prototype developed under the Bank’s Branch Redesign Project that showcases and integrates corporate image and branch merchandising with its service channel blueprint.
The Bank marked several corporate milestones in 2015, capping the year with the merger of China Bank Savings Inc. (CBS) and Planters Development Bank (Plantersbank), with the former as the surviving bank. It also launched its credit card products – China Bank Prime, Platinum, and World MasterCard credit cards – to complete its suite of consumer banking products.
China Bank Savings (CBS) was recently granted its banc assurance license to strengthen the CBS franchise as the bank for consumers and entrepreneurs.
The Bank also set-up its investment house subsidiary, China Bank Capital Corp., to provide capital raising, merger & acquisition, financial restructuring, debt and securities underwriting, and economic advisory services to public and private companies. Two (2) senior officers were also added to the roster of China Bank’s Management: Patrick D. Cheng as head of Trust Group, and Romeo D. Uyan Jr. as president of the investment house.
China Bank and its employee union have recently agreed on a new two-year collective bargaining agreement (CBA) amounting to PhP511 million.
China Bank migrated to the Finacle Core Banking Solution (FCBS) in August 2015. The roll-out and implementation initiatives was dubbed China Bank/CBS PLUS (Program to Level Up our Service). This more powerful platform from Infosys will support the Bank’s expanding operations, enhance service quality, and drive customer loyalty, growth, and innovation.
For the fourth straight year, China Bank won a Bell Award for Corporate Governance from the Philippine Stock Exchange (PSE), which honors publicly-listed companies and trading participants that adhere to the highest standards of corporate governance. China Bank is again the only bank among the awardees in the publicly-listed company category, and the only company to have been recognized at all Bell Awards since it was launched in 2012.
Founded in 1920, China Bank offers a wide range of financial products and services through its network of 517 branches and 740 ATMs (including 352 branches and 590 ATMs for China Bank and 165 branches and 150 ATMs of CBS & Planters bank) as of Dec 2015. Complementing this branch network are convenient and secure electronic banking channels for day & night banking service – China Bank Teller Card ATM, China Bank Online (mobile and internet banking), and China Bank Teller Phone (phone banking).