In the first nine months of 2023, China Banking Corp. (Chinabank) reported a net income increase of 10% to P16.2 billion ($322 million), up from P14.7 billion year-on-year, according to recent financial results. The bank's return on equity stood at 15.6%, and return on assets was 1.6%. In the third quarter alone, Chinabank's net earnings rose by 16% to P5.4 billion.
The bank's growth has been attributed to robust core business performance and lower loan loss provisions. Despite a high interest rate environment, Chinabank managed to increase its net interest income by 16% to P39.2 billion, offsetting a surge in interest expenses.
Operating expenses for the bank increased by 14% to P20.5 billion due to higher manpower and inflation-related costs. However, the cost-to-income ratio remained healthy at 50%. Chinabank's CEO, Romeo D. Uyan Jr., emphasized the bank's focus on preserving margins, managing costs, and leveraging technology.
Gross loans increased by 10% year-on-year to P765 billion, driven primarily by a substantial 19% expansion in consumer loans, including teachers’ loans and credit cards. The bank's nonperforming loan (NPL) ratio remained at a better-than-industry average of 2.2%, with an NPL cover at 126%.
Total deposits saw a significant growth of 14%, reaching P1.1 trillion, which resulted in a current account savings account (CASA) ratio of 49%. The bank's total assets increased by 11% to P1.4 trillion, solidifying Chinabank's position as the fourth largest private domestic bank.
Chinabank's common equity Tier 1 ratio stood at 14.9%, while the total capital adequacy ratio was at 15.8%. The bank's total capital grew by seven percent to P141 billion, indicating strong capital generation and asset quality. This growth aligns with the bank's ongoing efforts to optimize its capital structure. The book value per share remained at P52.50, while the bank's stock price stayed unchanged at P30.40.
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