China Banking Corporation or Chinabank posted a 15-percent growth in net income amounting to P22 billion last year from the level in 2022, due to lower provisions for bad loans and higher demand for consumer loans.

Net interest income jumped by 17 percent to P53.5 billion as gross loans increased by 10 percent to P791 billion, Chinabank’s disclosure to the Philippine Stock Exchange revealed Tuesday.

Specifically, consumer loans expanded to 23 percent of the total loan portfolio.

Meanwhile, non-performing loans or NPL ratio was stable at 2.5 percent. This was better than the industry’s average ratio, Chinabank stressed.

Provisions for NPL were reduced to P1.2 billion which the bank attributed to “improving economic conditions.”

NPL coverage remained sufficient at 104 percent, it added.

Deposit volume encouraging

Chinabank said volumes of deposits remained substantial. However, the bank stressed its liabilities to depositors were lower than the income it gained from the double-digit growth in loans.

As a result, the bank recorded a better net interest margin of 4.2 percent.

Operating expenses grew by 11 percent to P27 billion, mainly due to taxes and additional investments in technology and manpower.

“Substantial overhauls are underway within Chinabank’s information technology architecture as an integral component of its ongoing digital transformation endeavors,” the bank said.

Due to continued growth in core businesses, Chinabank’s total assets expanded by 11 percent to P1.5 trillion.

The bank added return on equity at 15.5 percent and return on assets at 1.6 percent remained among the highest in the industry last year.

“Our continuous drive for operational efficiency and the strong client demand for our services underpin our solid financial performance in 2023. We will continue to strengthen our business fundamentals and capabilities to sustain our growth momentum in the coming years,” Chinabank chief finance officer Patrick Cheng said.

Chinabank remained well-capitalized, with a capital adequacy ratio of 16.1 percent and a common equity tier 1 ratio of 15.3 percent. Both are above the regulator’s minimum requirements.