China Banking Corp. (Chinabank) posted an 11% year-on-year increase in net income to P14.5 billion for the first six months of the year, fueled by robust loan growth across its core lending segments. The result keeps Chinabank among the country's most profitable private universal banks and underscores how Philippine lenders have continued to benefit from sustained credit demand even as the Bangko Sentral ng Pilipinas held benchmark interest rates at multi-year highs through the first half.

In a disclosure to the stock exchange on Thursday, the bank said: "Bottom-line expansion was driven by the surge in core lending, strong balance sheet growth, and the optimization of risk cushions given the health of the bank's loan book."

The first-half performance translated into a return on equity of 15.1% and a return on assets of 1.6%. The bank's detailed financial statement was unavailable as of press time.

Net interest income rose 14% year on year to P39.7 billion, with a net interest margin of 4.67%, well above the industry average reported by the Bangko Sentral ng Pilipinas. Operating expenses climbed 11% to P18.4 billion, which the bank attributed to ongoing business expansion, yielding a cost-to-income ratio of 50%.

Gross loans surged 17% year on year to P1.1 trillion at end-June, driven by strong demand across both corporate and consumer segments. Despite this expansion, Chinabank's nonperforming loan (NPL) ratio held steady at 1.5%, in line with the banking system's overall asset quality metrics. The bank allocated P1.2 billion in impairment and credit loss provisions for the first half, resulting in an NPL coverage ratio of 106%.

On the funding side, total deposits grew 14% to P1.5 trillion as of June, supported by a 21% increase in low-cost peso checking and savings accounts (CASA).

"Including foreign currency CASA deposits, total CASA stood at P750 billion, translating to a CASA ratio of 49% and a lower overall cost of funds," Chinabank said.

Total assets climbed 13% to P1.9 trillion, while total equity rose 11% to P192 billion. Book value per share increased 11% to P71.46. The bank's capital adequacy ratio stood at 15.6%, with a common equity Tier 1 ratio of 14.7%, both comfortably above the regulatory minimums set by the Bangko Sentral ng Pilipinas.

Chinabank operates a consolidated network of 673 branches and 1,150 automated teller machines.

The bank's shares gained P1.50, or 2.86%, to close at P54 apiece on Thursday.

— Aaron Michael C. Sy