Slide 1: Analysts' Briefing 1H 2024 Results
Analysts’ Briefing 1H 2024 Results August 6, 2024 1
Slide 2: Panelists
Panelists Patrick D. Cheng Gerald O. Florentino Chief Finance Officer Investor Relations Head 2
Slide 3: 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 3
Slide 4: 1H 2024 Financial Performance
1H 2024 Financial Performance 4
Slide 5: 1H 2024 Financial Highlights
1H 2024 Financial Highlights P11.4 Bn 15.1% 14.5% P56.4 1H 2024 Net Income Return on Equity CET-1 Ratio Book value per share 1H 2024 Net income grew 6% to P11.4 billion; Income Resilient NII despite pressure on funding cost; NIM improved by 25 bps YoY to Statement 4.44% in 1H 2024; Provisions
Slide 6: 1H 2024 Financial Highlights: Income Statements
1H 2024 Financial Highlights INCOME STATEMENTS YoY 1H 2023 1H 2024 In Php billions, except % change Interest income 37.9 44.7 18% Interest expense (12.3) (14.3) 16% Net interest income 25.5 30.4 19% Fee-based income 1.5 (1.4) n.m. Total revenue 27.0 29.0 7% Operating expenses (13.4) (14.1) 5% Income
Slide 7: 1H 2024 Financial Highlights: Balance Sheets
1H 2024 Financial Highlights BALANCE SHEETS YoY Jun 2023 Jun 2024 in Php billions, except % change Liquid Assets 141 124 (12%) Investment Securities 476 572 20% Net Loans 726 797 10% Other Assets 42 51 22% TOTAL ASSETS 1,385 1,545 12% Deposits 1,121 1,283 14% CASA 553 569 3% Time Deposits 568 715 26
Slide 8: Sustained profitability amidst a challenging environment
Sustained profitability amidst a challenging environment Quarterly Net Income (In PHP Bn) Semi-annual Net Income (In PHP Bn) +6% 11.2 11.4 10.8 6th consecutive quarters of breaching the P5-billion net income mark. 5.8 5.8 5.9 5.4 5.5 5.2 5.0 4.9 4.6 4.4 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2
Slide 9: 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) +20% vs 2Q23 20 consecutive 6.50% 6.57% +3% vs 1Q24 6.46% 6.47% 18.0 6.32% +10 bps 6.12% vs 1Q24 16.0 quarters of growth 15.0 15.4 5.28% (since 3Q19) 1
Slide 10: Resilient NII despite pressure on funding costs
Resilient NII despite pressure on funding costs Net interest income continues to grow Net Interest Income (In PHP Bn) +19% YoY 36 1.5 0.5 32 2.4 0.5 Total Deposits 28 4.9 Gross yield up 14% YoY Cost of funds 30.4 up 26 bps up 7 bps YoY YoY 24 25.5 Loans and investment 20 securities grew 10% and 20%,
Slide 11: Core fee-based income remains strong
Core fee-based income remains strong Fee-based Income, ex trading and FX losses (In PHP Mn) +64% 5,110 Miscellaneous +5.2X YoY 2,505 Higher deposits, Trust and transaction-based 3,110 Gain on investment properties fees offset lower investment banking fees. -4% YoY 483 465 445 Share in net income o
Slide 12: Demonstrated operational resiliency amidst high inflation
Demonstrated operational resiliency amidst high inflation Operating Expenses ex provisions (in PHP Bn) +5% 14.1 13.4 3.5 -6% YoY Others 3.7 Volume-related taxes higher due to bigger deposit balances and higher 1.2 +33% YoY Depreciation gross revenues. 0.9 Heavy investments on digital innovation
Slide 13: Improving asset quality and sufficient NPL cover
Improving asset quality and sufficient NPL cover Improved asset quality results to lower provisions NPL ratio has improved; NPL cover more than adequate Provisions (In PHP Bn) 13.0% 160% 141% 129% 140% 11.0% 128% 8.9 8.9 9.0 123% 116% 120% 9.0% 104% 108% 100% 7.0% 103% 95% 97% 94% 89% 80% 5.0% 60% 4
Slide 14: Sustained loan growth
Sustained loan growth Continued expansion in both consumer and business segments Well-secured consumer lending portfolio Gross Loans (In PHP Bn) Consumer Loans Breakdown, June 2024 +10% YoY Auto 817 791 745 718 181 201 +25% YoY Housing 12% 624 P201 144 161 572 123 56% Bn 114 Unsecured +5% YoY 574 61
Slide 15: Strong Deposit growth
Strong Deposit growth CASA inched up and still above pre-pandemic level Deposits per branch (In PHP Bn) Deposits (In PHP Bn) +14% YoY 1.98 1.83 1,283 1.75 1,187 1.67 1,121 1,066 1.32 1.35 1.10 0.94 835 863 715 0.77 0.89 611 +26% YoY 492 568 0.48 0.58 308 366 Pre-pandemic CASA level 0.87 0.90 0.89 0.
Slide 16: Strong internal capital generation results to higher buffer
Strong internal capital generation results to higher buffer Enough capital buffer: to absorb credit shock; 18% to support Asset Capital growth; Ratios and to sustain dividend payment to shareholders 0.7% 16% 1.3% 0.8% 15.8% 15.9% 16.1% 15.3% 0.6% 14.7% 0.9% 0.9% 15.3% 0.8% 0.9% 0.9% 14% 14.5%
Slide 17: Increasing dividend payments to Shareholders
Increasing dividend payments to Shareholders 8.00 30% 29% 27% 27% 27% 27% 7.00 25% +16% 5.9 6.00 22% 5.1 20% 5.00 27% 4.0 2024 Dividend Payout 4.00 15% 3.00 2.7 2.7 2.4 2.20 10% 6.0% 1.90 2024 Dividend Yield* 2.00 1.50 0.88 1.00 1.00 5% 1.00 - 0% 2019 2020 2021 2022 2023 2024 Dividend per share Divi
Slide 18: We are executing our strategies
We are executing our strategies Expanded business relationships (clients to access both sides of the balance sheets) Increased contributions from auxiliary businesses (FX, Trust and Capital markets) Increased digital investments (around 7% of OPEX) Strengthened Management Team with internal
Slide 19: In summary, Chinabank continues to be..
In summary, Chinabank continues to be.. FY2022 FY2023 1H'23 1H'24 Return on Equity 15.1% 15.5% 15.9% 15.1% Profitable Return on Assets 1.6% 1.6% 1.6% 1.5% CET 1/Tier 1 Ratio 15.1% 15.3% 15.2% 14.5% Adequately-capitalized 510.0% 510.0% Capital Adequacy Ratio 15.9% 16.1% 16.1% 15.3% 31.71642 3326.8% N
Slide 20: Q&A
Q&A Please click the “Raise Hand” button to be recognized. You may also send questions thru the chat box. 20
Slide 21: Additional Information
[E} Chinabank Additional Information
Slide 22: History of Chinabank
History of Chinabank Pre-2000s 2007 - 2015 2016 - 2019 2020 - 2024 2020. Raised P15 Bn via fixed- 2007. Acquired Manila Bank and rate retail bonds; Celebrated operated it as China Bank 100 years and restored Binondo Savings; Business Center 2021. Raised P20 Bn via fixed- Entered into a bancassurance
Slide 23: Company Profile
Company Profile Extensive Distribution Channels* Subsidiaries & Affiliates 648 1,078 10,914 Investment Grade Credit Rating Best in Corporate Governance Five Golden-Arrow Recognition, the highest corporate governance Baa2 award given by the Institute Stable of Corporate Directors (ICD). *As of June 3
Slide 24: SM Group: Strong Support & Synergies
SM Group: Strong Support & Synergies Chinabank benefits from being part of one of the largest and most diversified conglomerates in the Philippines Snapshot of SM Group Business Lines Chinabank’s Current Shareholdings Others SM Group 34% 39% SM Investments – 23% Retail Banking Property Sysmart Corp.
Slide 25: Digital Banking
Digital +32% Banking Digital TXNs year-on-year 1H 2024 vs 1H 2023 Bringing our signature touch in relationship banking to our +23% customers anytime, O/S Active Users anywhere. year-on-year +25% O/S Enrollments ≈72% year-on-year share of digital & e- +30% banking to total TXNs 1H 2024 Digital Gross
Slide 26: Awards & Distinctions
Awards & Distinctions People Management Association of the Philippines 2023 EMPLOYER OF THE YEAR Chinabank was recognized by the ASEAN Capital Markets Forum as among the ASEAN Asset Class, ASEAN Top 20, and Top 3 Philippine Publicly Listed Companies 26
Slide 27: Other Citations
Other Citations Suntrust P25 Bn Repower Energy Best Managed Fund Project Finance Development for Bond Long-Term Cesar E.A. Virata Top Brokering Top Fixed-Income Facility Corporation IPO Dollar Category Award Participant for Retail Dealing Participant (Bank Category) Transactions Debt Deal of the IPO
Slide 28: Highly capable management team
Highly capable management team Hans T. Sy Gilbert U. Dee Romeo D. Uyan, Jr. Chairman of the Board Vice Chairman of the Board President and Chief Executive Officer Chairman since 2011 Vice Chairman since 2011 With CHIB since 2014 Member of the Board since 1986 Member of the Board since 1969
Slide 29: Market Data
Market Data TRADING INFORMATION TRADING INFORMATION MARKET VALUATION Ticker (Bloomberg I Reuters) CBC PM I CBC.PS 2022 2023 1H24 Par value (PHP) 10.00 Book value per share 50.0 55.8 56.4 Outstanding shares 2,691,340,312 Earnings per share 7.1 8.2 8.4 Stock price as of July 31, 2024 40.00 Price to bo
Slide 30: Profitability significantly improved over the last 5 years
Profitability significantly improved over the last 5 years Became the 4th Reached P1 trillion largest private bank in Assets and P100 in PH in terms of Incorporated China billion in Equity Assets Acquired Bank Capital Pampanga-based Acquired Raised P15 billion Unity Bank Entered credit card from sto
Slide 31: Focus on optimizing branches in the last 5 years
Focus on optimizing branches in the last 5 years Became the 4th Reached P1 trillion largest private bank in Assets and P100 in PH in terms of Incorporated China billion in Equity Assets Acquired Bank Capital Pampanga-based Acquired Raised P15 billion Unity Bank Entered credit card from stock rights
Slide 32: Historical Financial Highlights: Balance Sheets
Historical Financial Highlights BALANCE SHEETS Jun 24 vs Jun 24 vs Dec 2019 Dec 2020 Dec 2021 Dec 2022 Dec 2023 Jun 2023 Jun 2024 in Php billions, except % Jun 23 Dec 23 Liquid Assets 144 205 188 178 155 141 124 (12%) (20%) Investment Securities 213 236 279 412 505 476 572 20% 13% Net Loans 569 557
Slide 33: Historical Financial Highlights: Income Statements
Historical Financial Highlights INCOME STATEMENTS 1H24 vs FY2019 FY2020 FY2021 FY2022 FY2023 1H2023 1H2024 In Php billions, except % 1H23 Interest income 47.7 47.7 46.5 57.2 79.4 37.9 44.7 18% Interest expense (21.6) (13.3) (7.4) (11.6) (25.8) (12.3) (14.3) 16% Net interest income 26.1 34.4 39.1 45.
Slide 34: Legal Disclaimer
Legal Disclaimer This presentation and the information contained herein as well as the materials distributed herewith ("Presentation") are the sole and exclusive property of China Banking Corporation (“Chinabank”) and shall only be used for the purpose intended herein. None of the information contai
Slide 35: Thank You!
[E} Chinabank Thank You! Focused on You