EAST WEST Banking Corp. (EastWest Bank) saw its net income triple in the first quarter amid the economy’s continued recovery.
The Gotianun-led bank’s attributable net income surged to P1.578 billion at end-March from P507.558 million in the same period last year, its quarterly report disclosed to the local bourse on Monday showed.
This translated to a return on equity of 10.3% and a return on assets of 1.6%, higher than 3.4% and 0.5% in the same period a year prior, respectively.
“The bank is fortunate to ride the tailwinds of the country’s economic recovery and we are already seeing the results of our decision to accelerate lending activities last year. This resulted in core revenues growing by 26%. We expect this momentum to continue moving forward,” EastWest President Jackie S. Fernandez said in a statement.
“Our continued focus on redeploying our resources to higher earning assets has allowed us to gain ground as far as the bank’s earning capacity is concerned. Headwinds remain as we expect funding costs to stay elevated and the impact of a possible US recession to hit closer to home. We are prepared for this and remain vigilant on economic developments… We believe however, that our well positioned consumer-centric business model will still lead to better results this year,” EastWest Bank Chief Executive Officer Jerry G. Ngo added.
The lender’s net interest income climbed by 17.27% to P6.11 billion, driven by higher income from loans, rising by 28.38% to P6.447 billion.
Net interest margin rose to 7.4% from 6.3% “as consumer loans continued to increase, coupled with the buildup of high-yielding fixed-income securities.”
The bank’s total operating income rose by 34.45% to P7.806 billion from P5.806 billion amid higher foreign exchange gains and service fees and commission income.
Fee income surged by 71.31% to P1.178 billion, while foreign exchange gains tripled to P99.077 million from P32.197 million.
Gains from trading and securities stood at P111.142 million versus the P262.079-million loss in the previous year.
Meanwhile, operating expenses went up by 21.2% to P6.134 billion due to higher taxes, investments in manpower, IT development and business-related expenses.
EastWest Bank’s cost-to-income ratio was at 61% in the first quarter, down from 69.4% a year prior.
The bank’s loans and receivables slipped to P258 billion as of March from P258.1 billion at end-December 2022.
“Except for corporate loans, which decreased from normal business flows, all consumer loan products showed an increasing trend,” the lender said.
“Consumer lending was up by 6.16% year on year to P201.62 billion, driven mainly by auto loans, credit cards and salary loans. On the other hand, corporate banking posted a decrease of 14% to P59.2 billion,” it added.
On the funding side, deposit liabilities stood at P319.4 billion, down from the P329.2 billion seen as of December 2022.
“CASA (current and savings accounts) went down by P5.9 billion to P255 billion, while time deposits decreased by 5.9% from P65.8 billion to P61.9 billion. Long Term Negotiable Certificate of Time Deposits amounted to P2.5 billion. Deposits declined across all products with the drop in FCDU (foreign currency deposit unit) deposits attributable to the decrease in volume and revaluation,” the bank said.
Its CASA ratio improved to 80% from last year’s 76%.
The bank’s total assets stood at P403 billion at end-March, 4.4% lower than the P421.4 billion seen at end-2022.
Its capital rose to P63 billion from P61 billion at end-2022. Its capital adequacy ratio was at 14.4% and its common equity Tier 1 ratio stood at 13.6% as of March.
As of March 31, the bank had a total of 392 branches and 580 automated teller machines nationwide.
EastWest Bank’s shares went up by 17 centavos or 2.43% to close at P7.18 each on Monday.