China Banking Corporation (China Bank), stock symbol CHIB, is the first privately-owned commercial bank in the Philippines, which catered initially to the needs of Chinese-Filipino businessmen. Established in 1920, it played a key role in post-World War II reconstruction and economic recovery through its support to businesses and entrepreneurs in critical industries. It was listed in the local stock exchange in 1927, became the first bank in Southeast Asia to process deposit accounts on-line in 1969, the first Philippine bank to offer phone banking in 1991, and acquired its universal banking license in the same year.
Over the years, China Bank has been involved with strategic alliances to expand and strengthen its operations. China Bank is now one of the largest private domestic universal banks in the Philippines in terms of capital base, assets and market value, and is one of the best-governed publicly-listed companies in the country.
China Bank offers a complete range of deposit, lending, international and investment banking products and services to corporate, commercial, and retail customers. It also provides capital raising, merger and acquisition, financial restructuring, debt and securities underwriting, securities brokerage and economic advisory services through its investment house, China Bank Capital Corporation (CBCC), offers bancassurance and insurance brokerage services through its subsidiaries China Bank Manulife Life Assurance Corporation (MCBLife) and China Bank Insurance Brokerage, Inc. (CBIBI), respectively, and an array of banking of products and services for the retail and SME (small and medium enterprises) markets through thrift bank subsidiary, China Bank Savings, Inc. (CBS).
Driven by its mission to be a catalyst of wealth creation for its customers, China Bank is continually expanding its geographic footprint and product offerings. It began an aggressive branch network expansion program in 2006 and has since tripled its number of branches from 148 in 2006 to 561 as of June 2017 (including 155 CBS branches). This wide branch network is complemented by electronic banking channels—ATM (close to 800), online banking, and phone banking—that provide secure and reliable 24/7 banking service and convenience.
With nearly a century of solid financials, strong commitment to personal, quality service, significant contribution to the country’s financial landscape, and an enduring legacy of successful partnerships with generations of clients trusting the Bank with their wealth and future, China Bank remains to be one of the most respected, trusted, stable and profitable financial institutions in the country.
China Bank commenced business on August 16, 1920. It was established by Dee C. Chuan, a leading business leader and philanthropist, Don Albino Sycip, a leading lawyer in the Philippines, and 10 other prominent businessmen of the era. With a modern Chinese organization structure, and guided with an in-depth understanding of the way Filipino-Chinese businessmen do business—like operating on the principle of xinyong or trustworthiness—China Bank steadily grew and flourished. However, when Japan invaded Manila in 1942, the Bank was liquidated by the Japanese Military authorities. The Bank reopened on July 23, 1945. Since then, a succession of highly capable leaders and visionaries steered the Bank into decades of successful operations. China Bank was among the first local banks listed at the Manila Stock Exchange in 1927. In 1969, it was first bank in Southeast Asia to process deposit accounts on-line. It was also the first Philippine bank to offer telephone banking in 1991. The Bank was issued a license to engage in universal banking in 1991, as well.
Joint venture and acquisitionsAside from organic growth, China Bank seeks out opportunities to build scale. In 2007, it entered into a bancassurance joint venture with Manufacturers Life Insurance Company (Manulife), the fifth largest insurance company in the world, to form MCBLife, making China Bank a one-stop shop for customers’ banking and insurance needs. In the same year, it also acquired The Manila Banking Corporation (Manila Bank), the oldest savings bank in the country, and established its thrift bank arm, China Bank Savings (CBS). In November 2012, China Bank acquired Pampanga-based rural bank Unity Bank to fast-track the savings bank’s branch expansion program. The acquisition boosted CBS’ network with 15 Unity Bank branches and additional 24 branch licenses in the restricted areas granted by Bangko Sentral ng (BSP) under the Strengthening Program for Rural Banks (SPRB) Plus. With a mandate to grow its own branch network, CBS launched its “mini branch” concept in 2013, which called for the opening of full service mini branches in retail outlets like Savemore and Hypermart, both popular grocery chains by the SM Group. In 2014, China Bank acquired Plantersbank, the country’s largest private development bank and leading bank for SMEs. The deal bolsters China Bank’s current strategy in two areas—growing its middle market/SME portfolio and accelerating its branch network expansion program. In the same year, China Bank also raised its equity stake to 40% in MCBLife.
Investment house subsidiaryThe Bangko Sentral ng Pilipinas (BSP) approved in May 2015 China Bank’s P500 million venture in its new investment house subsidiary, China Bank Capital Corporation (China Bank Capital). China Bank Capital will provide capital raising, merger and acquisition, financial restructuring, debt and securities underwriting, securities brokerage and economic advisory services to all types of public and private companies. China Bank obtained approval from the Securities and Exchange Commission (SEC) in December 2015. China Bank Capital also established in April 2016 a stock brokerage house and a special purpose corporation, named China Bank Securities Corporation, and CBC Assets One (SPC) Inc., respectively. The stock brokerage house will enable China Bank Capital to do Initial Public Offerings (IPOs) and list these IPO shares in the PSE. On the other hand, the special purpose corporation will be utilized as a vehicle to hold the assets for the securitization transactions of China Bank Capital.
China Bank has been a significant presence in the investment banking and capital markets space in the last three years, and has been recognized by the Philippine Dealing System as the top corporate issue manager in the bank category for 2015, besting three foreign banks. The addition of these two new subsidiaries to China Bank Capital’s portfolio will round out its offerings and help improve its capabilities on the capital origination side.
Credit CardTo complete its range of product offerings, China Bank entered the credit card business and teamed up with MasterCard in 2013. In 2014, the Bank acquired TranzWare Online and TranzWare Card Management System of Compass Plus to drive and process the Bank’s credit card business. In 2015, it publicly launched China Bank MasterCard Prime, Platinum and World mid-2015, during the Bank’s 95th anniversary. China Bank is optimistic that its credit card business will grow as projected amid the country’s flourishing credit card industry.
‘Branch Re-Design’ project China Bank embarked on a major “branch re-design project” in 2015 as part of its ongoing expansion and development plans to provide customers with enhanced levels of service, convenience, and engagement. China Bank BGC-One World Place, which opened in September 2015, is the pilot branch for the new branch design, together with Cebu SRP – Seaside Mall Branch in November. The new design features an open layout, dynamic seating, contemporary counters and fixtures, and a progressive yet timeless ambience that still capture the rich heritage and character of the Bank, while maintaining a warm and personal customer experience.
Stock rights offerIn 2014, China Bank raised P8 billion in fresh capital through a stock rights offering (SRO) as part of its continuous proactive capital management strategy to enhance financial flexibility and balance sheet to support the on-going strategic business expansion. This marked the first time that China Bank raised capital from stockholders. The second time came in 2017 when China Bank successfully completed its P15 billion SRO the proceeds of which will be used to grow the Bank's loan portfolio, expand its branch network, and support its other strategic business initiatives.
Syndicated term loanChina Bank secured a US$158 million three-year term loan facility from regional and international banks in June 2015. The facility marks China Bank's successful return to the international markets since its US$125 million floating rate certificates of deposit (FRCD) issue in 1996 and 1997. The facility carried an interest margin of 1.40% per annum over 3 months Libor. In June 2017, the Bank paid off the loan one year ahead of schedule, citing strong growth in foreign currency deposit and favorable changes in market conditions.
Business transformation project: new core banking systemChina Bank rolled out Finacle Core Banking Solution (FCBS) in August 2015. The move to replace the legacy system with the robust and more powerful FCBS from Infosys, a global leader in consulting, technology and outsourcing solutions, is part of the overall upgrade and enhancement initiative dubbed China Bank/CBS P.L.U.S. (Program to Level Up our Service) to support the Bank’s expanding operations and drive customer loyalty, growth, and innovation. China Bank acquired Finacle in 2012 for significantly greater computing power and enhanced capability and flexibility to improve service quality, optimize customer experience, manage risk and regulatory compliance more effectively, and easily adapt to changing customer demands and market trends.
Credit ratings In 2017, China Bank received an investment grade credit rating of Baa2 (the same level as the Philippine sovereign rating and at par with the country's top three banks) from Moody’s Investors Service, one of the world leaders in corporate business ratings. Prior to this, international credit rating agency Fitch Ratings affirmed China Bank’s Long-Term Issuer Default Rating at ‘BB+’ and its Viability Rating at ‘bb+’ with stable outlook in February, following an upgrade in July 2016.