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China Bank declares P4.04 billion cash dividends; nets P4.9 billion in 1Q 2022, up 37%

Thursday, May 05, 2022

At the regular meeting held yesterday, the Board of Directors of China Banking Corporation (China Bank, PSE stock symbol: CHIB) declared P1.00/share regular dividend and an additional P0.50/share special dividend, reflecting China Bank’s confidence in its underlying strength and future prospects. The total cash dividends of P4.04 billion is 50% higher compared to the P2.69 billion dividends paid last year and translates to a better cash dividend yield of 5.6% based on the Bank’s closing price of P26.70 as of May 4, 2022. The cash dividends represent 27% of the full year 2021 net income of P15.1 billion. The dividends will be paid on June 3, 2022 to stockholders on record as of May 20, 2022.

The Bank recorded net profits of P4.9 billion in the first quarter of 2022, 37% more compared to the same period last year.  The improved profitability, driven by sustained core business growth, yielded a higher return on equity of 16.0% and a better return on assets of 1.7%.

Due to rounding, numbers presented in the tables may not add up precisely to the totals provided
and percentages may not precisely reflect the absolute figures.

As the Philippine economy continues to recover from the Covid-19 pandemic, China Bank’s net interest income rose 15% year-on-year to P10.8 billion on the back of higher earning assets and lower interest expense.  Net interest margin further improved to 4.3%.  Meanwhile, lower trading gains compressed fee-based income to P1.7 billion, despite an 18% increase in service charges, fees, and commissions and a 22% jump in trust fees.  

“China Bank’s organic growth momentum continues—loans and deposits are up, expenses are down, and credit quality remains solid,” China Bank President William C. Whang said. 

Provisions for credit losses were reduced by 65% to P780 million, reflecting an improved macro-economic outlook.  The resulting non-performing loan (NPL) coverage was higher at 119%. 

Prudent cost management led to an 8% drop in total operating expenses, further improving the cost efficiency ratio to 46%.

The Bank’s total assets expanded 12% to P1.1 trillion.  Asset quality remained healthy as NPL ratio was maintained at 2.5% as of end-March 2022, still lower than industry average.

Due to rounding, numbers presented in the tables may not add up precisely to the totals
provided and percentages may not precisely reflect the absolute figures.

“Our effective asset-liability management and solid capital structure have allowed clients to access our balance sheet and enabled us to achieve better-than-industry growths in assets, loans, and equity.  Moreover, the growth of CASA deposits continued to improve our funding cost,” China Bank Chief Finance Officer Patrick D. Cheng said.

Increased demand across corporate and consumer borrowers resulted to a 10% jump in gross loans to P632 billion.  Total deposits reached P879 billion, up 8%, with an improved CASA (checking and savings account) ratio of 64%.

Total equity rose 15% to P125 billion, with a common equity tier 1 ratio of 15.5% and total capital adequacy ratio of 16.3%.

China Bank was recently named the Best Bank in the Philippines in 2021, and its investment house subsidiary China Bank Capital, the Best Bond Adviser (Domestic) for the 6th consecutive year, by regional financial magazine The Asset. Both also won the top awards at the Philippine Dealing System Annual Awards: the Cesar E.A. Virata Best Securities House (Bank category) for China Bank and the Top Corporate Issue Manager/Arranger (Investment House Category) for China Bank Capital. The Bank was also included in British newspaper Financial Times' 2022 ranking of the top 500 high growth companies in the Asia Pacific region—the only bank among the 15 Philippine companies in the comprehensive list.

China Bank also emerged as the second strongest bank in the Philippines and among the top 20% in the Asia Pacific region in The Asian Banker’s ranking of 500 strongest banks in 2021. It made the biggest leap among the nine Philippine banks included in the prestigious list, jumping from 323rd place in 2020 to 81st place last year.

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