China Banking Corp. · PSE:CBC
China Banking — FY2022 Earnings Presentation
32 slides from China Banking's earnings presentation, Mar 14, 2023
Slide 1: China Banking Corporation Analysts' Briefing FY 2022 Results
China Banking Corporation ANALYSTS’ BRIEFING FY 2022 Results March 14, 2023
Slide 2: Disclaimer
Disclaimer ANY INVESTMENT DECISION TO PURCHASE SECURITIES IN THE CONTEXT OF A PROPOSED OFFERING, IF ANY, SHOULD BE MADE ON THE BASIS OF THE FINAL TERMS AND CONDITIONS OF THE SECURITIES AND THE INFORMATION CONTAINED IN THE OFFERING CIRCULAR PUBLISHED IN RELATION TO SUCH AN OFFERING AND NOT ON THE BAS
Slide 3: Panelists
Panelists Patrick D. Cheng Gerald O. Florentino Domini S. Velasquez Chief Finance Officer Investor Relations Head Chief Economist 3
Slide 4: Reminders
Reminders Microphones and cameras are disabled during the presentation. For the Q & A, attendees may: Post a live question click the “Raise Hand” button to be recognized Send questions thru the chat box
Slide 5: Macroeconomic Outlook
Macroeconomic Outlook
Slide 6: Macroeconomic Overview
Macroeconomic Overview Inflation Interest Rates & FX Economic Growth 1. Inflation likely peaked in 1. The BSP’ already hiked by 400 bps 1. Better-than-expected global January at 8.7% since May 2022. We expect growth due to shallower another 25-bp rate hike this recessions and China reopening 2. Down
Slide 7: Macroeconomic Overview
Macroeconomic Overview FY 2021A FY 2022A FY 2023F GDP growth (%) 5.6 7.6 5.8 Inflation (%) 3.9 5.8 6.1 Policy rate (end, %) 2.00 5.50 6.25 10-Year BVAL Rate (end, %) 4.829 6.994 5.9 USDPHP (end) 50.999 55.755 55.6 Key Takeaways 1. Moderate economic growth in 2023 due to heightened domestic risks: in
Slide 8: FY 2022 Financial Performance
FY 2022 Financial Performance
Slide 9: FY 2022 Performance Highlights
FY 2022 Performance Highlights We delivered sector-leading* returns. P19.1 Bn 15.1% 1.6% 44% 1stProfitability in return on equity (ROE) 1st in cost-to-income ratio Net Income ROE ROA Cost-to-income 2nd in return on assets (ROA) Growth 4th We maintained a strong balance sheet and Largest* 2.3% 123% d
Slide 10: We are the 4th largest privately-owned universal bank
We are the 4th largest privately-owned universal bank Source: Published SOCs as of Dec-2022 #4 #4 #4 1trillion .3 1.1 #6 700 billion trillion 135 billion ASSETS NET LOANS DEPOSITS EQUITY 10
Slide 11: 2022 Financial Highlights
2022 Financial Highlights INCOME STATEMENTS FY2021 FY2022 YoY Growth FY2021 FY2022 In Php billions, except % Interest income 46.5 57.2 23% Interest expense (7.4) (11.6) 57% Return on Equity 13.58% 1.49% +149 bps 15.07% Net interest income 39.1 45.6 17% Fee-based income 9.6 10.1 5% Return on Assets 1
Slide 12: 2022 Financial Highlights
2022 Financial Highlights BALANCE SHEETS Dec 31, 2021 Dec 31, 2022 YoY Growth FY2021 FY2022 in Php billions, except % Liquid Assets 188 178 -5% Investment Securities 279 412 48% NPL Ratio 2.5% -0.2% -15 bps 2.3% Net Loans 609 700 15% Other Assets 36 40 10% NPL Cover 116% 7% +7 pp 123% Total Assets 1
Slide 13: Sustained profitability amidst a challenging environment
Sustained profitability amidst a challenging environment Quarterly Net Income (In PHP Bn) Annual Net Income (In PHP Bn) 22 +27% YoY 20 19.1 18 16 15.1 14 +13% vs 4Q21 12.1 12 10 8 6 4.9 5.2 4.6 4.4 3.6 3.7 3.9 3.9 4 2 0 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 FY2020 FY2021 FY2022 13
Slide 14: Resilient NII despite pressure on funding costs
Resilient NII despite pressure on funding costs NIM stabilizes above 4% Net interest income continues to grow Q-on-Q Net Interest Income (In PHP Bn) 60% of loans +15% vs 4Q21 Interest rate repricing 14.0 14 consecutive +1% vs 3Q22 quarters of growth 11.9 6.27% 11.7 12.0 (since 3Q19) 11.2 +18 bps 10.
Slide 15: Fee-based income remains strong
Fee-based income remains strong Core Fee income continues to grow Fee-based Income (In PHP Bn) 12.0 10.1 10.0 9.5 9.6 - - Core fee income grew 20% YoY to P5.9 billion. 8.0 3.8 4.7 The decline in Treasury-related gains was offset by higher 5.6 6.0 0.4 accrual income on Investment securities. +20%
Slide 16: Stable asset quality and sufficient NPL cover
Stable asset quality and sufficient NPL cover Conservative policy results to higher provisions NPL has stabilized; NPL cover remains adequate Provisions (In PHP Bn) 13.0% 180% 167% +2% YoY 160% 11.0% 8.9 8.9 9.0 129% 128% 140% 9.0% 123% 116% 108% 120% 108% 7.0% 94% 95% 89% 100% 5.0% 80% 2.6 4.1% 60%
Slide 17: Demonstrated operational resiliency amidst persistently high inflation
Demonstrated operational resiliency amidst persistently high inflation Prudent cost management Improving efficiency Operating Expenses ex provisions (In PHP Bn) +9% YoY 2020 2021 2022 24.4 22.3 21.5 Manpower Headcount 9,825 9,747 10,237 8.1 +9% YoY 7.5 7.5 Taxes and licenses Branches 634 637 640 +34
Slide 18: Disciplined loan growth
Disciplined loan growth Continued expansion in both consumer and corporate segments Well-secured consumer lending portfolio Gross Loans (In PHP Bn) Consumer Loans Breakdown, Dec-22 2018-2022 CAGR +15% YoY 13% 8% 718 624 +18% YoY 144 578 572 Housing Auto 513 123 60% 107 14% 114 87 573 502 +14% YoY 47
Slide 19: Strong Deposit growth
Strong Deposit growth Sustained CASA growth and steady funding mix Improving CASA per branch Deposits (In PHP Bn) Deposits per branch (In PHP Bn) +24% YoY 1,066 1.67 835 863 1.32 1.35 775 492 722 1.23 +60% YoY 1.16 0.77 308 366 0.48 364 0.58 321 0.52 0.58 +3% YoY 555 573 0.87 0.90 469 0.74 401 412 0
Slide 20: Strong internal capital generation results to higher capital buffer
Strong internal capital generation results to higher capital buffer 18% Enough capital buffer: to absorb credit shock; 2.7% 16% 2.0% to support Asset growth; and 0.0% to sustain dividend payment to shareholders 14.9% 15.1% 14% 15.8% 15.9% 14.7% 0.9% 13.7% 0.8% 13.1% 0.9% 0.9% 12% 0.9% 14.9% 15
Slide 21: Digital Banking
Digital +35% Banking Digital TXNs year-on-year Retail, FY‘22 vs FY‘21 Bringing our signature touch in relationship banking to our +16% customers anytime, anywhere. O/S Active Users year-on-year +36% O/S Enrollments ≈70% year-on-year share of digital & e- +35% banking to total TXNs full-year 2022 Gro
Slide 22: Awards & Distinctions
Awards & Distinctions The Bank also received the Five-Golden Arrow Recognition, the highest corporate governance award given by China Bank was recognized by the ASEAN Capital Markets the Institute of Corporate Directors Forum as among the ASEAN Asset Class, ASEAN Top 20, and Top 3 Philippine Publicl
Slide 23: Other Citations
Other Citations China Bank Easy Tax Mobile Banking & Apo Agua Infrastructure 2nd Strongest Bank in the Payment Initiative of the Top Corporate Securities Php9 Billion financing Cesar E.A. Virata Award Best Digital Business Philippines Year Market Makers and Top (Bank Category) Banking Initiative Phi
Slide 24: In summary, CHIB continues to be..
In summary, CHIB continues to be.. 2020 2021 2022 Return on Equity 12.1% 13.6% 15.1% Profitable Return on Assets 1.2% 1.5% 1.6% CET 1/Tier 1 Ratio 13.8% 14.9% 15.1% Adequately-capitalized Capital Adequacy Ratio 14.7% 15.8% 15.9% NPL Ratio 2.3% 2.5% 2.3% Well-managed NPL Coverage Ratio 128% 116% 123%
Slide 25: Q & A
Q&A Please click the “Raise Hand” button to be recognized. You may also send questions thru the chat box.
Slide 26: Additional Information
Additional Information
Slide 27: China Bank Profile
China Bank Profile Who we are One of the oldest privately owned banks, established in 1920 Publicly-listed since 1927 on the Manila Stock Exchange Strong presence in the entrepreneur, middle market and business segments Longest relationship with Chinese-Filipinos, serving up to the 4th gener
Slide 28: China Bank Profile
China Bank Profile EQUITY PROFILE CREDIT RATINGS Particulars March 10, 2022 Investment grade credit rating of Baa2 with stable outlook from May 2017 Ticker CHIB Same level as the Philippine sovereign rating Stock Price Php31.35 and at par with the country’s three biggest Market Cap (in PHP Mn) 8
Slide 29: China Bank Profile
China Bank Profile Corporate Milestones 2007 Acquired Manila Bank 2020 2022 and operated it as 2018 China Bank Savings 2014 Raised P15 billion via Became the 4th (CBS); Entered into a 2016 Infused P500 million to fixed-rate retail bonds; largest* bank in the Acquired Plantersbank CBS and P40 million
Slide 30: Strong Support and Synergies with the SM Group
Strong Support and Synergies with the SM Group China Bank benefits from being part of one of the largest and most diversified conglomerates in the Philippines Snapshot of SM Group Business Lines Current Shareholdings Others SM Investments 23% 26% Sysmart Corp 15% SM Group Sy Family 1% 39% Retail Ban
Slide 31: Highly capable management team
Highly capable management team Hans T. Sy Gilbert U. Dee William C. Whang* Chairman of the Board Vice Chairman of the Board Director and President Romeo D. Uyan, Jr.** Patrick D. Cheng Aloysius C. Alday, Jr. Senior Executive Vice President and Executive Vice President and Chief Executive Vice Presid
Slide 32: Thank You!
Thank You! 32