Bank Officials say record breaking gains achieved
- 2010 Audited net income went up almost 3x or 191.3% to Php1.81 billion from Php 621.7 million in end 2009.
- Net Revenues increased by Php1.97 billion or 36.0% to Php7.44 billion. Increase in Net Revenues was driven by growth in the following areas:
- Net Interest Income increased by Php788.9 million to Php4.32 billion from Php3.53 billion.
- Loans expanded by 20.1% with a hefty 30.4% increase in Business Loans, to Php22.8 billion. Consumer loans, which consist of Credit Cards, Auto and Mortgages, on the other hand grew by 11.0%.
- EastWest has maintained its good deposit cost structure.Total interest bearing liabilities increased by 10.1% even as interest expense declined by Php102.8 million or 6.2% year-on-year. This was mostly due to the higher increase in low cost deposits at 20.3% vis-a-vis the 5.4% increase in high cost funds and the generally lower interest rates.
- As a result of the earning asset expansion and better liability structure, EastWest Bank continued to have one of the higher net interest margins in the industry at 6.05% as of end 2010.
- Fees and Other Income (ex-trading) increased by 30.7% to Php1.67 billion. This resulted as expansion of the Bank’s customer base continued and was boosted by the growth in the Bank’s branch network. Total non-interest income, including trading, expanded by 60.8%.
- The Bank reported its return on equity at 19.8%, one of the highest in the industry.
- Both loans to deposit and liquidity ratios remained healthy at 68.0% and 45.5%, respectively. Of the Bank’s total resources of Php83.76 billion, Php38.10 billion constituted liquid assets.
- Our capital adequacy ratio (CAR) remained at 15.96%, way above the 10% minimum requirement of the BSP with Tier 1 ratio at a healthy 11.0%
- Total Operating expenses, excluding provisions, increased by Php523.2 million or by only 14.8% to Php4.1 billion as the Bank continued to improve productivity from economies of scale. The increase largely came from Compensation & Benefits, which grew by 30.2% on account of higher provisions for bonuses to employees. Other operating expenses only grew by 8.3%.
- The Bank’s NPL (net of NPLs with 100% provision) ratio decreased from 6.89% in end 2009 to 3.54% in end 2010. This improvement on the back of robust 20% increase in loan receivables was a result of fine tuning the Bank’s credit processes and increased collection efficiencies.
- The Bank set aside total provisions for bad loans equivalent to 94.5% of NPLs.
- EastWest opened 28 branches in 2010, growing its network to 113 branches. The Bank expects no further losses from these NPLs and in fact there could be potential reversals of loan loss provisions if we take into account collaterals and the normal number of borrowers who naturally experience better fortunes. The positive economic prospects should increase chances of significant recoveries from loans already with loan loss provisions.
- Statements:
- President & CEO Tony Moncupa, Jr.: “We are delighted to see the fruits of the seeds we have planted the past few years. The programs we have adopted to improve customer service, increase operating efficiencies, and put in place sound governance and risk management practices is paving the path towards sustainable grow th and profitability.”
- Chairman Jonathan Gotianun: “There is a great sense of excitement among us in EastWest, as we commit to sustain the momentum of growth we achieved during the previous year. The Bank will continue to harness the strength of its balance sheet and the capabilities of its human resource in maintaining its performance for the current year and in the years to come.”