China Banking Corp. · PSE:CBC
China Banking — Investor Presentation (2021)
29 slides from China Banking's investor presentation, 2021
Slide 1: Investor Presentation Full Year 2020
INVESTOR PRESENTATION Full Year 2020
Slide 2: Agenda
1 China Bank Profile 2 2020 Performance 3 Leadership Team 4 Awards and Recognitions 5 Appendix 2
Slide 3: China Bank response to COVID-19
China Bank response to COVID-19 EMPLOYEES CLIENTS AND COMMUNITY Almost 100% of branches open for operations Compliant with health standards of DOH, DOLE, DTI, and IATF • Detection, contact tracing, testing, isolation & Working closely with clients in the most challenged referral sectors • Hous
Slide 4: 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 5: China Bank Profile: Equity Profile and Credit Ratings
China Bank Profile EQUITY PROFILE CREDIT RATINGS Particulars December 31, 2020 Investment grade credit rating of Baa2 from May 2017 Ticker CHIB Same level as the Philippine sovereign Stock Price 24.95 rating and at par with the country’s three Market Cap (in PHP Mn) 67,013 biggest banks Market C
Slide 6: Major Milestones
China Bank Profile Major Milestones Acquired Manila Bank with 75 branch licenses and renamed to China Bank Investment Banking Savings Subsidiary Spin-off Celebrated 100 years, Infused additional restored Binondo Incorporated PHP500 million Business Center Acquired capital to CBS 1920 1927 2007 2012
Slide 7: 2020 Performance
1 China Bank Profile 2 2020 Performance 3 Leadership Team 4 Awards and Recognitions 5 Appendix 7
Slide 8: China Bank at a Glance
China Bank at a Glance How did we perform in 2020 vs 2019 In Php Billions, except % +20% 12.09% + 105 bps Return on Equity +27% +6% +3.5x 1.2 1.21% + 11 bps 9.2 6.2 -8% Return on Assets 0.1 - 3.92% + 53 bps 12.1 10.1 Net Interest Margin Net Income Net Operating Provisions Income Net Income 49% - 10
Slide 9: Sustained profitability amidst a challenging environment
Sustained profitability amidst a challenging environment Shareholder value creation through improving returns Enable us to increase Dividend Payout and Yield Net Income (PHP in Bn) +20% 6.0 12 5.0 10 4.9 8 4.0 3.4 3.0 +14% 6 12.1 2.7 2.6 10.1 2.5 2.3 4 8.1 2.0 7.5 6.5 5.6 2.7 2.2 2.4 2 1.0 1.9 2.0 1
Slide 10: NIM performance driving revenue growth
NIM performance driving revenue growth NIM improved from lower Interest Rates and RRR Net Interest Income 6.4 6.3 6.2 6.2 Financial 5.9 5.7 Markets 5.5 5.6 5.5 10% 5.3 5.1 5.0 30% Others 11% 3.8 3.8 3.9 3.9 3.6 3.6 3.6 3.5 3.3 3.2 3.3 3.4 P33.8 Bn 2.9 2.9 2.8 2.7 2.0 1.9 1.7 1.7 Retail Banking Lendi
Slide 11: Capitalized on favorable market conditions
Capitalized on favorable market conditions Higher trading gains offset lower fee income Fee-based Income Fee-based Income (PHP in Bn) +19% Others Lending 16% 9% 10.0 10 8.4 Retail 2.3 5.4 +2.4X Banking 19% P10.0 Bn 5 Financial 6.2 Markets 4.6 -26% 56% 0 2019 2020 Fee income Trading and securities ga
Slide 12: Absorbed substantial provision for credit losses
Absorbed substantial provision for credit losses Ramped up Provisions on COVID-19 Impact While Loan Loss Coverage Remains Sufficient Provisions (PHP in Mn) +3.5x 200 2.5 8,869 2.5 2.5 167 2.3 150 146 128 126 2.0 1.9 109 104 100 99 1.7 91 87 1.6 1.5 2,570 1.5 1.4 50 967 1.2 851 754 141 - 1.0 2015 201
Slide 13: Demonstrated operational resiliency amidst COVID-19 pandemic
Demonstrated operational resiliency amidst COVID-19 pandemic Prudent Cost Management Improving Efficiency Operating Expenses ex provisions (PHP in Bn) Cost-to-income +6% 25 21.5 2018 2019 2020 20.3 20 8.2 +2% 8.0 15 63% 59% 49% 1.8 -2% 1.8 10 4.0 +4% 3.9 5 -4 pps -10 pps 7.5 +14% 6.6 0 2019 2020 Man
Slide 14: Continues to grow in the secured consumer lending space
Continues to grow in the secured consumer lending space Consumer loans now 20% of gross loans Well-secured Consumer Lending Portfolio Gross Loans (PHP in Bn) Consumer Loans Breakdown as of Dec-2020 2015-2020 CAGR 700 -1% 19% 11% 578 Credit cards Personal 600 572 1% loans 13% 513 +7% 107 114 500 YoY
Slide 15: Deposit growth primarily driven by CASA
Deposit growth primarily driven by CASA Strong Retail Base Improving Deposits per Branch Deposits (PHP in Bn) Deposits per branch (PHP in Bn) 1,000 +8% 1.4 1.32 900 835 1.23 775 1.2 1.16 800 722 1.07 700 1.00 635 1.0 0.6 366 0.6 600 364 0.85 0.5 542 321 0.5 0.8 500 0.5 439 292 0.4 400 265 0.6 212 30
Slide 16: Strong internal capital generation results in higher capital buffer
Strong internal capital generation results in higher capital buffer 0.42% 14% 0.43% 1.90% 13.82% 12.76% Enough capital buffer: 12% to absorb credit shock; to support Asset growth; and to continue dividend distribution to 10% shareholders Minimum CET 1 ratio, including buffers 8% CET1 Ratio, Ne
Slide 17: Leadership Team
1 China Bank Profile 2 2020 Performance 3 Leadership Team 4 Awards and Recognitions 5 Appendix 17
Slide 18: Highly Regarded Management Team
Highly Regarded 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. Rosemarie C. Gan Patrick D. Cheng Executive Vice President and Chief Executive Vice President and Segment Executive Vice President and
Slide 19: Awards and Recognitions
1 China Bank Profile 2 2020 Performance 3 Leadership Team 4 Awards and Recognitions 5 Appendix 19
Slide 20: Best Practice in Governance
Best Practice in Governance Track record of excellence in Corporate Governance The ASEAN Capital Markets Forum named China Bank for fiscal year 2019 as: Among the top 3 publicly listed companies (PLCs) in the Philippines; Among the top 20 PLCs in ASEAN, and As an ASEAN Asset Class The Institut
Slide 21: Other Citations
Other Citations Atlantic Gulf and Pacific China Bank Corporation Mobile Banking & Apo Agua Infrastructure Del Monte Pacific US$200 Company Php6 Billion P30 Billion Fixed Rate Payment Initiative of the Php9 Billion financing Million Preferred Shares term loan Retail Bond Year Best Bond Adviser Philip
Slide 22: Thank you
Thank you 22
Slide 23: Appendix
1 China Bank Profile 2 2020 Performance 3 Leadership Team 4 Awards and Recognitions 5 Appendix 23
Slide 24: Strategic plans in place to deliver on our targets
Strategic plans in place to deliver on our targets 24
Slide 25: 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 27% SM Investment 23% SM Group Sysmart Corp 15% 38% Retail Banking Property
Slide 26: Distributing Meaningful Equity to Ordinary Employees
Distributing Meaningful Equity to Ordinary Employees Centennial Stock Grant Plan – Key Terms and Conditions* All regular employees of the CBC group** as of 16 August 2020, and other officers and contractual employees of any CBC Group entity (as specified by the Chairman of the Board) Minimum ser
Slide 27: Financial Highlights – Balance Sheet
Financial Highlights – Balance Sheet In Php Billion 2020 2019 Inc(dec) Liquid Assets 205 144 42% Investments 236 213 11% Net Loans 557 569 (2%) Other Assets 38 37 5% Total Assets 1,036 962 8% Deposit Liabilities 835 775 8% Bills Payable 24 33 (29%) Bonds Payable 52 37 39% Other Liabilities 20 20 1%
Slide 28: Financial Highlights – Income Statements
Financial Highlights – Income Statements In Php Billion 2020 2019 Inc(dec) Interest income 47.1 47.7 (1%) Interest expense (13.3) (21.6) (39%) Net interest income 33.8 26.1 30% Fee-based income 10.0 8.4 19% Net revenues 43.9 34.5 27% Provision for impairment losses (8.9) (2.6) 3.5x Operating expense
Slide 29: Financial Highlights – Segment Information
Financial Highlights – Segment Information For the year ended December 31, 2020 Lending Retail Financial Others Total In Php million Business Banking Markets Net interest income 8,876 17,841 3,383 3,742 33,843 Fee-based income 1,014 1,924 5,565 1,508 10,011 Total revenue 9,890 19,765 8,948 5,250 43,