EastWest Bank earnings jump 36 percent in Jul-Sep

MANILA - The banking arm of the Gotianun group on Wednesday said its third-quarter profit jumped 36 percent year-on-year on the back of higher income from its loans, fee and trading businesses.

In a disclosure to the Philippine Stock Exchange, East West Banking Corp said it earned P446 million in the July to September period, up from P118 million last year.

EastWest said net interest income - consisting largely of gains from the bank's lending business - went up 29 percent to P1.56 billion.

Service charges, fees and commissions rose 28 percent to P492 million on the back of the growth in consumer lending and deposit-related transactions. Trading and securities gains went up five and a half times to P597 million from P108 million in third quarter last year.

The third-quarter performance increased the bank's nine-month net income by 12 percent year-on-year to P1.36 billion.

EastWest closed the third quarter with a non-performing loan ratio of 4.3 percent, down from the 4.8 percent a year ago. Its loan loss coverage stood at 91 percent of total non-performing loans.

At end-September, the bank's capital adequacy ratio (CAR) - a measure of solvency - stood at 19.3 percent, up from 15.5 percent a year ago and well above the 10 percent regulatory minimum. Its Tier 1 capital ratio likewise improved to 15.4 percent from 11.2 percent in 2011.

The bank ended the third quarter with 217 branches, 133 of these in Metro Manila and 107 in restricted areas. EastWest had 41 branches in other parts of Luzon, 23 in Visayas and 20 in Mindanao.

The bank listed at the PSE last May, and on November 10 ended the sale of P5 billion worth of long-term negotiable certificates of deposit, with the proceeds meant to expand EastWest Bank's lending business.

source: interaksyon.com

Unionbank expects double-digit consumer loan growth to continue

MANILA - Union Bank of the Philippines is confident that its lending business would continue to grow by 30-35 percent on the back of a "very robust" expansion of the economy

Victor B. Valdepeñas, Unionbank president and chief operating officer, said the loan growth recorded in the first six months is sustainable, but would slow down towards the end of the year.

He said lending grew 20-25 percent, with mortgages registering the biggest expansion at 35 percent, followed by auto loans at 30 percent.

"If you just look at the skyline of Metro Manila, never have you seen in the history that you have seen as many equipment and as many high-rises, as many big projects coming out - horizontal, vertical and all over - that is replicated all over in other areas. There is a construction boom, particularly in the residential and mixed-development area. So that is a phenomenon that started years ago continues to be very, very strong," Valdepenas said.

The bank’s auto loans dipped earlier in the year but was already picking up, whereas credit cards will not be as strong as the other two consumer lending, he said.

Lending to corporations is seen to grow by 19-20 percent since Unionbank is participating in the public-private partnership program of the government, Valdepenas said, adding that the lender has not technical expertise on such projects.

Besides direct lending, Unionbank is also participating in capital-raising exercises, such as San Miguel Corp.’s preferred share sale. Valdepenas said the bank has taken up P6 billion of the P80-billion transaction, both for Unionbank's own account, as well as for its clients.

"So you see the growth is not only coming out of the traditional lending but also in the capital market. We're happy to participate in terms of funding viable projects of big corporations, corporations that are dominant players in the Philippine economy," he said.

Non-interest income would still be "strong" but not as robust as in the first semester when Philippine banks saw their trading income surge with the performance of the local stock market.

"I won't expect it will be as strong as the first half. The reason behind is as you approach a certain level, the drop in yields is now muted and limited. And that is true for the global environment including the Philippines," Valdepenas said.

Against the backdrop of a strong macroeconomic environment, Unionbank is on track to meet its 10-15-percent net income growth target for the year. During the first half, the lender’s profit surged 42.12 percent to P4.07 billion.

Valdepenas said the bank does not have to raise additional capital as many of its investments are in low-risk weighted assets such as government securities. Unionbank is still "comfortable" even with the implementation of Basel III, which requires higher capitalization for lenders.

Towards the end of the year, the lender will have almost 200 branches nationwide, having just opened new ones in Medical City, Makati and Nuvali in Sta. Rosa, Laguna.

source: interaksyon.com