China Banking Corp. (China Bank, PSE: CHIB) posted PHP4.2 billion in consolidated profits for the first semester of the year, 18% higher compared to the same period last year. For the second quarter, net income jumped 27% versus the first quarter.
The sustained loans and deposits build-up and greater contribution from fee-based businesses resulted to improved earnings, which translated to a year-on-year return on equity of 9.45% and return on assets of 0.95%.
Net interest income rose 6% to PHP11.7 billion, driven by double-digit growth in loans and securities. Meanwhile, fee-based income grew better than expected, by 61% to PHP3.4 billion, from higher trading gains and service fees and commissions.
“Our strong financial performance in the first half reflects our good fundamentals that provide the foundation for sustainable growth. As we continue to build on our strengths, we are confident about meeting our goals for the year and delivering value to our customers and other stakeholders,” said China Bank President William C. Whang.
Total resources stood at PHP908 billion, 18% higher year-on-year. Deposits grew 15% to PHP750 billion, underpinned by a 15% increase in CASA (checking and savings accounts). Gross loans reached PHP533 billion, up 12%, driven by stronger demand across all customer segments. Despite the sustained loans growth, non-performing loans (NPL) ratio improved to 1.2% from 1.5%, while NPL coverage expanded to 148%.
Total capital funds rose 8% to PHP90.4 billion. The Bank’s CET 1/ Tier 1 and total capital adequacy ratios stood at 12.9% and 13.8%, respectively.
China Bank successfully raised PHP30 billion last month as investors supported its maiden issue of peso fixed rate bonds. Six times oversubscribed, it was one of the largest corporate bond issuances on a single issuance in the market and had the most number of registered bondholders to date.