Taguig—(PHStocks)—East West Banking Corp. (EastWest Bank, PSE: EW) registered a net income of PhP3.4 billion in 2016, 70% higher than the PhP2 billion booked in 2015. Its total assets increased by 25% to P292 billion, led by the 51% increase in its consumer loan portfolio.
EW’s core recurring income was up by 25%. The bank sustained its industry-leading net interest margin of 7.7%. Net interest margin, net of provisions for loan losses, was recorded at 4.9%, still the highest among universal and commercial banks. EastWest is the most consumer-focused universal bank in the country with more than half its loan portfolio lent to consumers.
Last year, the bank had targeted 50% earnings growth for 2016 as it expected to see the early result of its aggressive expansion program that saw EastWest’s nationwide store network almost triple in five years to 445, including its rural bank subsidiary. Total loans grew by 29% to PhP202 billion, while total deposits went up by 30% to PhP240 billion, underpinned by a 38% increase in low-cost deposits.
“As previously mentioned, 2016 will show the early results of our expansion program that started in 2012. This puts behind us the worst of the initial pain of the program that brought us to have the 7th largest store network but kept our income flat at PhP2 billion in the previous three years,” said EastWest President & CEO Antonio C. Moncupa Jr.
The bank’s net revenues grew 34% to PhP22 billion, while operating expenses rose 21% to PhP12 billion. “Our productivity is improving as the overhead cost related to the expansion of the last three years gain traction. And that is just the start. We expect further improvement in operating leverage and subsequently, better returns to our investors in the coming years,” Moncupa added.