Makati—(PHStocks)—China Banking Corp. (PSE: CHIB) posted a 15% growth in net income to PhP6.45 billion in 2016, reflecting sustained growth in core businesses across all market segments. This translates to a return on equity of 10.4% and return on assets of 1.16%.
Net interest income grew 11% to PhP16.69 billion, driven by the 12.5% rise in interest revenue from loans to PhP17.89 billion. Fee-based revenues improved 14% to P5.09 billion, bolstered by trading gains of PhP918.09 million, and robust growth in revenues from service charges and fees, trust fees and gains on sale of acquired assets. Operating expense growth was limited to 7.9% even with the continued expansion in its branch and distribution network and continued investments in people and technology to support the growth of new businesses.
Total assets grew 20% to PhP633.2 billion, as loans and deposits grew faster than industry. Gross loans rose 24% to PhP393.74 billion, led by the 27% growth in consumer loans. Total deposits rose 23% to P541.6 billion, with the 21% growth in low-cost CASA deposits to PhP276.4 billion reflecting the strength of the China Bank franchise boosted by deposit growth from new branches. CASA ratio stood at 51%, while loans-to-deposit ratio stood at 71.4%.
China Bank President and CEO Ricardo R. Chua said, “Our 2016 results reflect the teamwork and dedication of everyone in the China Bank group to achieve significant growth in the major market segments – corporate, middle market and entrepreneurs – where we are traditionally strong and establishing a stronger presence in the consumer segment, and more recently in the capital markets.”
“China Bank Savings (CBS) achieved full year profitability in 2016, following the successful integration in 2015 of Plantersbank (acquired in 2014) into CBS. China Bank Savings ended the year as the fourth largest thrift bank with PhP83 billion in assets and PhP58 billion in loans. Its network of 150 branches as of December 2016 is bigger than the China Bank branch network of 148 branches 10 years ago,” added Chua. “In addition, China Bank Capital Corp (CBCC) marked its first full year by capturing the largest market share as lead arranger and underwriter in domestic retail bond issues.”
Total capital funds reached PhP63.37 billion, resulting in healthy capital ratios with Common Equity Tier 1 (CET 1) at 11.30% and Total CAR 12.21%. China Bank is set to raise PhP15 billion in additional capital from a stock rights issue to supports its growth strategy.
China Bank infused an additional PhP2.5 billion in 2016 to China Bank Savings. It also approved the increase in the authorized capital of China Bank Capital from PhP500 million to PhP2 billion, with a PhP500 million infusion increasing its paid up capital to PhP1.0 billion.
“We look forward to 2017 with our usual cautious optimism, actively pursuing opportunities while mindful of the challenges from a volatile global environment. We mark the 10th anniversary of our network expansion triggered by the acquisition of Manila Bank (renamed China Bank Savings), which saw our network more than triple from 148 branches to 541.”
“We also mark the 10th anniversary of our Manulife bancassurance partnership thru the Manulife China Bank Life Assurance MCBL, now a major contributor in fee-based revenues.”
China Bank won an unprecedented fifth PSE Bell Award for consistently being among the top 5 out of 268 listed companies for exemplary corporate governance practices. China Bank was similarly recognized for Best Bank Governance by London-based Global Banking and Finance Review, and Capital Finance International Awards, and cited by journal Corporate Governance Asia as Outstanding in Corporate Governance. It was also recognized as Banking and Finance Firm of the Year 2016 Philippines by UK-based Finance Monthly Global Awards.
Fitch Ratings affirmed in February 2017 the Bank’s Long-Term Issuer Default Rating at ‘BB+’ and its Viability Rating at ‘bb+’ with Stable outlook, following an upgrade in July 2016.
About China Bank
Founded in 1920, China Bank is the country’s first privately owned local commercial bank and is now the sixth largest private universal bank in terms of assets. As of year-end 2016, it has a network of 391 branches, and a combined total of 541 with thrift arm China Bank Savings.