DESPITE the surge in bad loans provisions, China Banking Corp. was able to conclude last year’s operations with double-digit growth, bucking the downtrend in the banking sector.
The listed bank recently reported that it grew its net income by 20 percent to P12.1 billion last year from P10.1 billion in 2019, thanks to better topline figures.
Loan-loss buffer was increased by 3.5 times to P8.9 billion in the past year in anticipation of the slowdown in business activities. However, China Bank said this was offset by robust growth in core business and returns from investment and trading.
Net interest income was up 30 percent to P33.8 billion last year due to 39-percent decline in interest expense, which resulted in higher net interest margin of 3.92 percent.
Non-interest income was at P10 billion for the period, which is a 19-percent improvement supported by P5.4-billion trading and security gains.
Return on equity and return on assets stood at 12.1 percent and 1.2 percent, respectively.
“Going into the crisis, China Bank was operationally and financially sound, but what enabled us to remain resilient and to sustain our growth momentum was our employees who went above and beyond in 2020,” China Bank President William C. Whang was quoted in a statement as saying. “Our relentless efforts to build and maintain robust liquidity and capital levels have positioned the Bank well to weather the ongoing storm, and at the same time, to help our customers and the country recover.”
Current and savings account deposits, which grew by 14 percent to P469 billion, lifted the total deposits to P835 billion. Time deposits, meanwhile, inched up by 1 percent to P366 billion for the period.
Gross loans, meanwhile, declined by 1 percent to P572 billion as “business customers reduced loan drawdown,” China Bank explained. Nonperforming loans (NPL) ratio was at 2.3 percent while NPL coverage stood at 128 percent.
“We continue to support our customers through the uncertainty of Covid-19, providing credit, debt relief, and payment moratorium while ensuring capital and liquidity preservation,” China Bank Chief Finance Officer Patrick D. Cheng said. “We have formulated strategies to mitigate asset quality issues given the possibility of a drawn-out pandemic.”
As of end-December 2020, the bank’s total assets were at P1.04 trillion. Capital accounts climbed by 9 percent to P105 billion last year, with common equity tier 1 ratio of 13.82 percent and capital adequacy ratio of 14.73 billion.
In February, China Bank raised P20 billion—four times the original offer size of P5 billion—from its first issuance of bonds this year. The proceeds were allocated for strategic initiatives and expansion programs.
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