EAST West Banking Corp. (EastWest) posted a net income of P3.4 billion in the first half, down 17 percent from P4.1 billion a year earlier, despite booking higher net revenues and operating profit as it set aside increased provisions for probable loan losses.
The bank on Friday said loan loss provisions reached P10.1 billion during in January-June, reflecting a more prudent approach to managing credit risk amid continued macroeconomic and geopolitical uncertainty.
Net revenues climbed 19 percent to P28.4 billion from P23.8 billion, driven by higher interest earnings and growth in non-interest income.
Net interest income rose 21 percent to P23.1 billion from P19.2 billion while non-interest income increased 14 percent to P5.3 billion from P4.6 billion.
While operating expenses grew 11 percent to P14.0 billion, the bank said revenue growth continued to outpace costs, resulting in a 30-percent increase in pre-provision operating profit to P14.4 billion from P11.1 billion and the cost-to-income ratio improving to 49.3 percent from 53.2 percent.
"Our core businesses continued to deliver strong growth, as reflected in the increase in net revenues and pre-provision operating profit," EastWest CEO Jerry Ngo said.
"At the same time, we maintained a disciplined approach to credit risk while preserving our capacity to support customers and pursue sound growth opportunities," he added.
The bank said total assets expanded 16 percent to P623.9 billion from P537.8 billion, supported by measured lending growth.
Loans increased 10 percent to P396.7 billion from P360.6 billion while deposits grew 15 percent to P472.9 billion from P411.2 billion. The bank maintained a current account and savings account ratio of 76 percent.
EastWest's capital adequacy ratio stood at 12.5 percent while its common equity tier 1 ratio was at 11.7 percent, both above regulatory requirements and after accounting for cash dividends declared in May.
During the first half, the bank expanded its wealth management and payments and digital banking offerings through enhancements to EastWest Priority and the rollout of Garmin Pay. It also continued investing in digital technology, data analytics and artificial intelligence to improve customer experience, productivity and risk management.
Starting July 15, meanwhile, EastWest waived InstaPay transfer fees while continuing to offer free PESONet transfers in support of the Bangko Sentral ng Pilipinas' push for wider adoption of affordable digital payments.
"We remain focused on strengthening our core businesses while continuing to invest in capabilities that make banking easier and more relevant for our customers," Ngo said.
The bank’s shares on Friday rose P0.02, or 0.17 percent, to close at P11.80 each.
