China Bank to raise P100B in 3 years

LISTED China Banking Corp. (China Bank) looks to generate up to P100 billion in fresh funds in the next three years.

In a disclosure on Thursday, the Sy-led lender said its board of directors greenlighted on March 3 the planned fundraising, to be done in several tranches. These may be in the form of retail bonds and/or commercial papers, or a combination of both.

“The proceeds shall be used to support the bank’s strategic initiatives and expansion program. This is also in line with the bank’s intention to be an active participant in the country’s economic recovery and expansion,” China Bank said.

China Bank has 634 branches and 1,022 automated teller machines (ATMs) to date. These include the 158 branches and 164 ATMs of thrift subsidiary China Bank Savings.

Earlier, the bank reported a net income to P12.1 billion last year, despite the huge buffer it had set aside to cushion its lending business from the economic impact of the coronavirus pandemic.

The amount, up 20 percent from

P10 billion in 2019, resulted in its return on equity improving to 12.1 percent from 11 percent and on assets to 1.2 percent from 1.1 percent.

In the fourth quarter alone, net income picked up by 13 percent year-on-year to P3.82 billion from P3.37 billion.

“The strong growth in core businesses and better investment and trading returns offset the bank’s pandemic-related loan buffer of P8.9 billion, which was 3.5 times higher than in 2019,” China Bank said.

Net interest income expanded by 30 percent to P33.8 billion, which was traced to the 39-percent fall in interest expense. This led to a wider net interest margin of 3.92 percent.

Non-interest income grew by 19 percent to P10.0 billion, “lifted by trading and securities gains, which expanded more than double in 2020 to P5.4 billion,” the bank said.

China Bank shares decreased by 15 centavos or 0.61 percent to close at P24.35 each on Thursday.