CHINA BANKING Corp.’s (China Bank) net income rose in the first half despite higher provisioning amid the ongoing coronavirus pandemic.
China Bank booked a P5.2-billion net income from January to June, up 24% from a year earlier, it said in a statement on Thursday. The bank did not provide quarterly figures when asked.
The lender said it increased its provisions more than 14 times to P4.8 billion “in anticipation of the impact of COVID-19 (coronavirus disease 2019) and ongoing quarantine measures on asset quality.”
China Bank’s interest income climbed 39% to P16.2 billion, buoyed by an increase in earning assets and reduced funding costs as interest rates continued to drop.
Its net interest margin inched up to 3.8% from 3.2%.
“Our first half results reflect China Bank’s continued strength and resilience, and demonstrate the soundness of our strategies to thrive in the new normal. I am very grateful to our employees for their dedication and flexibility and to our customers for their continued trust and patronage,” China Bank President William C. Whang was quoted as saying.
The bank booked P21 billion in total operating income in the first half, up 40% from the year prior.
China Bank also saw its non-interest income surge 41% to P4.7 billion on the back of a 212% increase in trading and securities gains to P2.8 billion.
The lender’s loan portfolio rose 11% to P593 billion. Its nonperforming loan ratio stood at 1.6% and bad loan cover at 146% level.
The bank’s operating expenses inched up five percent to P10.4 billion “from COVID-19 and higher volume related expenses,” while the cost-to-income ratio improved to 50% from 66%.
Meanwhile, deposits rose three percent to P773 billion, with the current account, savings account deposits at 53%. Its total capital also grew 8% to P98 billion.
The bank’s assets reached P982 billion as of June fueled by loan growth of eight percent.
China Bank Chief Finance Officer Patrick D. Cheng said the bank continues to have “ample liquidity and sufficient capitalization” as shown in its balance sheet and is monitoring developments amid the ongoing coronavirus crisis.
“In these uncertain times, we remain cautiously optimistic. We are adapting our strategies accordingly and managing our capital with the prudence that the current volatility calls for,” Mr. Whang said.
China Bank’s shares dipped 0.10% to P19.98 apiece on Thursday from Wednesday’s close of P19.90 each. — Beatrice M. Laforga