China Banking Corp. · PSE:CBC
China Banking — 9M 2022 Earnings Presentation
35 slides from China Banking's earnings presentation, Nov 10, 2022
Slide 1: China Banking Corporation Investor Analysts' Briefing Presentation
China Banking Corporation INVESTOR ANALYSTS’ BRIEFING PRESENTATION 9M 2022 Results 9M 2021 Performance November 10, 2022
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 Chief Finance Officer Investor Relations Head 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: 9M 2022 Financial Performance
9M 2022 Financial Performance
Slide 6: 9M 2022 Performance Highlights
9M 2022 Performance Highlights • Increased profitability with 9M 2022 net income up 31% to P14.7 Billion YoY driven by sustained NII growth Profitability • Improved return on equity of 15.6% and return on assets of 1.6% • Cost-to-income ratio further improved to 43% • Continued assets expansion at 2
Slide 7: Financial Highlights
Financial Highlights INCOME STATEMENTS 9M2021 9M2022 YoY Growth In Php billions, except % Interest income 34.3 40.6 18% Interest expense (5.6) (6.8) 23% Net interest income 28.8 33.7 17% Fee-based income 7.8 8.3 6% Total revenue 36.6 42.0 15% Operating expenses (16.6) (18.0) 8% Income before provisi
Slide 8: 2022 Financial Highlights
2022 Financial Highlights BALANCE SHEETS Sep'22 vs Sep'22 vs Sep-21 Dec-21 Sep-22 in Php billions, except % Dec'21 Sep'21 Liquid Assets 195 188 168 -10% -14% Investment Securities 232 279 391 40% 68% Net Loans 592 609 676 11% 14% Other Assets 36 36 40 9% 10% Total Assets 1,055 1,112 1,274 15% 21% De
Slide 9: Sustained profitability amidst a challenging environment
Sustained profitability amidst a challenging environment Quarterly Net Income (In PHP Bn) +31% YoY 16 14.7 14 EPS* 12 11.2 P6.9/sh 10 8.3 8 +17% vs 3Q21 ROA 6 4.9 5.2 4.6 1.6% 3.7 3.9 3.9 3.6 4 2 ROE 0 15.6% 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 9M20 9M21 9M22 *Trailing 12 month EPS 9
Slide 10: 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) 6.20% +19% vs 3Q21 5.46% 5.46% +7 bps 13 consecutive +5% vs 2Q22 5.10% 5.10% quarters of growth 5.01% 5.03% (since 3Q19) 11.7 11.2 10.8 10.3 9.6 9.9 9.
Slide 11: Fee-based income remains strong
Fee-based income remains strong Core Fee income continues to grow Fee-based Income (In PHP Bn) 8.3 7.8 7.0 3.8 Core fee income grew 24% YoY to P4.3 billion. One-off 4.3 Service fees and commissions went up by 21% to P2.3 4.0 billion. 0.2 +24% The decline in Treasury-related gains was offset by
Slide 12: 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% 167% 180% 161% 160% +7% YoY 11.0% 8.9 8.9 129% 128% 140% 9.0% 116% 6.9 120% 6.5 108% 102% 7.0% 94% 95% 89% 100% 5.0% 80% 2.6 60%
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 (In PHP Bn) 51% 9M2021 FY2021 9M2022 25 45% 50% 43% 40% 20 Headcount 9,790 9,747 10,017 30% 18.0 persistent inflation +8% YoY + 15 16.3 16.6 20% weakening peso B
Slide 14: 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, Sep-22 vs Sep-21 +14% YoY 2018-2021 CAGR Sep-22 12% 6% 697 Unsecured 624 612 578 572 143 +21% YoY 25% 16% 513 122 118 107 114
Slide 15: 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) +18% YoY 1,001 1.57 835 863 849 1.32 1.35 1.33 775 722 420 1.23 +31% YoY 1.16 0.66 308 321 366 0.48 0.50 364 0.58 321 0.52 0.58 +10% YoY 555 582 0.91 529
Slide 16: Strong internal capital generation results to higher capital buffer
Strong internal capital generation results to higher capital buffer 0.58% Enough capital buffer: 16% 2.10% to absorb credit shock; 1.61% 0.07% to support Asset growth; and 14.92% 14.90% to sustain dividend payment to shareholders 14% 15.7% 15.7% 14.7% 13.7% 0.8% 0.8% 13.1% 0.9% 12% 0.9% 0.9% 1
Slide 17: Digital Initiatives
Digital Initiatives THE BEST BANK IN THE COUNTRY
Slide 18: Digital Banking
DIGITAL BANKING +41% 9M ‘22 vs 9M ‘21 Digital TXNs year-on-year Bringing our signature touch in relationship banking to our customers anytime, anywhere. +18% Active Users year-on-year ≈69% +42% share of digital & e- banking to total TXNs Enrollments year-on-year as of Sep’22 +40% underpinned by a ra
Slide 19: Awards and Recognitions
Awards and Recognitions & 2 2 8 c a THE BEST BANK IN THE COUNTRY &, misses Since 1920
Slide 20: We are the Best Bank in the Philippines
We are the Best Bank in the Philippines China Bank Best Bank in the Philippines China Bank Capital Best Bond Adviser (Domestic) for the 6th consecutive year Best New Bond: Sole issue manager, bookrunner and lead underwriter, D&L Industries’ P5 Bn fixed-rate retail bond Best Green Bond – Corp
Slide 21: 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 22: 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 23: In summary, CHIB continues to be..
In summary, CHIB continues to be.. 9M2021 FY2021 9M2022 Return on Equity 13.6% 13.6% 15.6% Profitable Return on Assets 1.5% 1.5% 1.6% CET 1/Tier 1 Ratio 14.4% 14.9% 14.9% Adequately-capitalized Capital Adequacy Ratio 15.3% 15.7% 15.7% NPL Ratio 3.4% 2.5% 2.0% Well-managed NPL Coverage Ratio 106% 116
Slide 24: Q&A
Q&A Please click the “Raise Hand” button to be recognized. You may also send questions thru the chat box.
Slide 25: Additional Information
Additional Information & 2 2 8 c a THE BEST BANK IN THE COUNTRY &, misses
Slide 26: Macroeconomic Outlook
Macroeconomic Outlook & 2 2 8 c a THE BEST BANK IN THE COUNTRY &, misses Since 1920
Slide 27: Macroeconomic Overview
Macroeconomic Overview Inflation Interest Rates & FX Economic Growth 1. Inflation hit a 14-year high of 1. The BSP’s policy rate is at 1. Slower global GDP in 2023 7.7% in October 4.25%, up 225 bps since the (IMF: 2.7%) due to a weaker start of the year China and recessionary risks in 2. Inflation p
Slide 28: Macroeconomic Overview
Macroeconomic Overview As of Oct FY 2021A FY 2022F FY 2023F 2022 GDP growth (%) 5.6 7.7 6.6 5.5-6.0 Inflation (%) 3.9 5.4 Emerging: 5.8 4.6 Policy rate (end, %) 2.0 4.25 5.5 5.75 10-Year BVAL Rate (end, %) 4.82 7.44 7.7 5.9 USDPHP (end) 51.00 57.97 58.0-58.5 59.0-59.5 Key Takeaways 1. Decent economi
Slide 29: 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 30: China Bank Profile
China Bank Profile EQUITY PROFILE CREDIT RATINGS Particulars November 9, 2022 Investment grade credit rating of Baa2 with stable outlook from May 2017 Ticker CHIB Same level as the Philippine sovereign rating Stock Price Php26.40 and at par with the country’s three biggest Market Cap (in PHP Mn)
Slide 31: China Bank Profile
China Bank Profile Corporate Milestones 2007 Acquired Manila Bank 2020 and operated it as 2018 China Bank Savings 2014 Raised P15 billion via (CBS); Entered into a 2016 Infused P500 million to fixed-rate retail bonds; Acquired Plantersbank CBS and P40 million to bancassurance joint Celebrated 100 ye
Slide 32: 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 33: Financial Highlights – Quarterly Income Statements
Financial Highlights – Quarterly Income Statements INCOME STATEMENTS 3Q22 vs 3Q22 vs 1Q2021 2Q2021 3Q2021 4Q2021 1Q2022 2Q2022 3Q2022 In Php billions, except % 2Q22 3Q21 Interest income 11.4 11.4 11.6 12.2 12.6 13.2 14.7 11% 26% Interest expense (2.0) (1.8) (1.8) (1.8) (1.9) (2.0) (2.9) 47% 68% Net
Slide 34: 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 Rosemarie C. Gan Senior Executive Vice President and Executive Vice President and Chief Executive Vice President and A
Slide 35: Thank You!
Thank You! ASC Ref No. C010P013122CS THE BEST BANK IN THE COUNTRY