From left: Directors Harley Sy and Joaquin Dee, Corporate Secretary Corazon Morando, Lead Independent Director Roberto Kuan, Chairman Hans Sy, Vice Chairman Gilbert Dee, Director Peter Dee, Director & President William Whang, Independent Directors Margarita San Juan and Alberto Yao, and Advisor to the Board Ricardo Chua.
At the annual stockholders’ meeting today of China Banking Corporation (China Bank, stock symbol: CHIB), the Bank declared P2.23 billion cash dividends (P0.83 per share), 12% higher than the previous year.
The cash dividends represent 30% of the full year 2017 net income of P7.52 billion, with a cash dividend yield of 2.38% based on China Bank’s closing price of P34.90 as of May 2, 2018. Payment will be on June 1, 2018 to China Bank stockholders as of May 17, 2018.
“Our good results last year sustained our ability to provide satisfactory returns to our shareholders who have shown their full support during our stock rights offering in 2014 and 2017,” said China Bank President William C. Whang.
The Bank has been consistently providing cash dividends. It paid P1.99 billion in 2017 and P1.85 billion in 2016.
The Bank also announced its first quarter consolidated net income of P1.50 billion, 2% higher compared to the same period last year.
The sustained growth of core businesses was evident in the first three months of the year as operating income increased 9% to P6.14 billion. Net interest income rose 18% to P5.29 billion, driven by the 20% growth in gross loan portfolio. Non-interest income (excluding trading gains) grew 6% to P1.14 billion from the increase in service charges, fees from investment banking, and income from foreign exchange gains. Core recurring income (operating income excluding trading gains) was up 16% year-on-year to P6.44 billion from P5.55 billion.
As China Bank carried out its expansion program by investing in new branches, more people, and up-to-date technology to support the growth of new businesses, operating expenses increased 13% to P4.24 billion.
Total assets expanded 16% to P722.63 billion—P102.23 billion more than Q1 2017 levels, driven mainly by the 20% growth in gross loan portfolio to P455.13 billion. Growth was registered across all market segments: consumer, commercial, and corporate.
Even as the lending portfolio was growing robustly, asset quality metrics further improved to better than industry levels. Non-performing loans dropped P1.31 billion, leading to an improved NPL ratio of 1.32%. The Bank’s loan loss coverage ratio reached an important milestone, jumping to 149% from 94% — better than the industry average of 121%. The same ratio at the parent bank level was even stronger at 282% from 159%.
The growth was funded by sustained increase in deposits. Total deposits rose 16% to P613.64 billion, underpinned by a 24% growth in CASA (checking & savings accounts) deposits to P338.73 billion, reflecting the strength of the China Bank franchise. CASA ratio also improved to 55%, while loans-to-deposit ratio stood at 73%.
The Bank’s financial position remains solid with total capital funds at P82.19 billion, up 27%, equivalent to a total CAR of 13.65% (CET 1 ratio of 12.79%).
“We are working hard to meet our goals for the year, focusing on sustainable earnings through our core businesses of loans and deposits and strengthening our fee-based revenue streams,” said Whang.
At the same stockholders’ meeting, Hans T. Sy and Gilbert U. Dee were re-elected chairman and vice chairman of the Board, respectively. The incumbent directors were also re-elected: William C. Whang, Peter S. Dee, Joaquin T. Dee, Harley T. Sy, Herbert T. Sy, Jose T. Sio; and independent directors Roberto F. Kuan—named lead independent director, Alberto S. Yao, and Margarita L. San Juan. Henry Sy, Sr. remained honorary chairman and advisor to the Board, along with Ricardo R. Chua.
China Bank was recently awarded by the Global Banking & Finance Review as “Best Bank for Corporate Governance Philippines 2017” and “Best Investor Relations Bank Philippines 2017”. Its investment house subsidiary, China Bank Capital, was named “Best Fixed Income House” and won four “Best Deals” awards at the recent Investment House Association of the Philippines (IHAP) Awards. China Bank and its thrift bank arm China Bank Savings are among the 20 financial institutions participating in InstaPay, the electronic fund transfer service recently launched by the Bangko Sentral ng Pilipinas.
About China Bank
Founded in 1920, China Bank is the country’s first privately owned local commercial bank and currently the sixth largest privately owned universal bank in terms of assets. It serves the banking needs of the corporate, commercial, and retail markets. The China Bank Group has 602 branches (442 China Bank, 160 CBS branches) to date. This wide branch network is complemented by electronic banking channels that provide secure and reliable 24/7 banking service: 924 ATMs, China Bank Online, China Bank Mobile Banking App, and China Bank TellerPhone.