China Banking Corp. · PSE:CBC
China Banking — H1 2021 Earnings Presentation
29 slides from China Banking's earnings presentation, 2021
Slide 1: Investor Presentation: 1st Half 2021 Performance
INVESTOR PRESENTATION 1st Half 2021 Performance
Slide 2: Agenda
1 China Bank Profile 2 1H2021 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 35% of employees fully vaccinated, 73% given 1st dose Almost 100% of branches open for operations Compliant with health standards of DOH, DOLE, Working closely with clients in the most challenged DTI, and IATF • Detection, conta
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 and Credit Ratings
China Bank Profile EQUITY PROFILE CREDIT RATINGS Particulars June 30, 2021 Investment grade credit rating of Baa2 from May 2017 Ticker CHIB Same level as the Philippine sovereign Stock Price Php25.50 rating and at par with the country’s three Market Cap (in PHP Mn) 68,490 biggest banks Market Ca
Slide 6: China Bank Profile: Major Milestones
China Bank Profile Major Milestones Issued PHP20 Acquired Manila Bank with 75 branch billion Fixed Rate licenses and renamed to China Bank Investment Banking Bond Savings Subsidiary Spin-off Celebrated 100 years, Infused additional restored Binondo Incorporated Acquired and PHP500 million Business C
Slide 7: Agenda
1 China Bank Profile 2 1H2021 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 1H2021? In Php Billions, except % +39% +18% +7% 0.7 +13% 0.6 +79% 3.9 0.5 1 Tn 596 Bn 827 Bn 110 Bn Gross Assets Deposits Equity Loans 7.3 5.2 +5% 1% +7% +12% Net Income Net Operating Provisions Income Net Income 1H2020 Revenues Expenses Tax 1H2021 • Gros
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 (In PHP Bn) 4.5 4.0 +39% 3.4 2.7 2.6 2.5 12.1 2.3 10.1 8.1 7.5 7.3 2.7 2.7 6.5 2.4 2.2 5.2 1.9 2.0 1.7 2016 2017 2018 2019 2020 1H2
Slide 10: Resilient NII despite pressure on yields
Resilient NII despite pressure on yields NIM continues to improve from lower funding costs Net Interest Income 6.4 6.3 6.2 6.2 5.9 5.7 Financial Others 5.5 5.6 5.5 Markets 11% 5.3 5.1 5.1 5.0 6% 5.0 Lending Business 31% 4.2 4.2 3.8 3.8 3.9 3.9 3.6 3.6 3.6 3.5 3.4 3.3 3.2 3.3 2.9 2.9 2.8 2.7 2.0 1.9
Slide 11: Fee-based income driving revenue growth
Fee-based income driving revenue growth Fee income recovers to pre-pandemic level Fee-based Income Fee-based Income (In PHP Bn) 10 +32% Others Lending 11% Business 8 9% 6.3 Retail 6 Banking 19% 4.7 3.4 4 2.8 2 Financial Markets 2.8 61% 2.0 0 1H20 1H21 Fee income Trading and securities gains Source:
Slide 12: Absorbed substantial provision for credit losses
Absorbed substantial provision for credit losses Ramped up provisions on COVID-19 impact While NPL remains below industry average Provisions (In PHP Mn) NPL (%) 4.6 8,869 13% 3.7 5,365 4,758 2.1 2.0 1.9 1.7 1.7 3.5 2,570 2.5 2.3 1.9 851 1.4 1.5 754 1.2 141 2016 2017 2018 2019 2020 1H20 1H21 Dec-15 D
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) Cost-to-income 14 +7% 1H20 1H21 12 11.1 10.4 10 4.6 4.2 +10% 8 6 0.8 0.9 +7% 50% 45% 1.9 2.1 -11% 4 2 +15% 3.3 3.8 0 1H20 1H21 Manpower Taxes Occupan
Slide 14: Disciplined loan growth
Disciplined loan growth Continued expansion in consumer lending segment Well-secured consumer lending portfolio Gross Loans (In PHP Bn) Consumer Loans Breakdown as of Jun-2021 2016-2020 CAGR 1% 700 17% 8% 593 596 600 578 572 Credit cards Personal 1% loans 513 14% 108 116 +7% 107 114 500 YoY 456 87 3
Slide 15: Deposit growth primarily driven by CASA
Deposit growth primarily driven by CASA Strong retail base Improving deposits per branch Deposits (In PHP Bn) Deposits per branch (In PHP Bn) +7% 1.32 1.30 835 827 1.23 1.22 775 773 1.16 722 1.07 1.00 0.5 635 310 0.6 366 0.6 0.6 364 366 0.5 542 321 0.5 0.5 292 265 517 0.8 469 0.7 412 407 0.6 0.7 0.6
Slide 16: Strong internal capital generation results in higher capital buffer
Strong internal capital generation results in higher capital buffer 16% 0.41% 0.04% 1.11% 0.39% 14% 14.17% 13.82% Enough capital buffer: to absorb credit shock; 12% to support Asset growth; and to continue dividend distribution to shareholders 10% Minimum CET 1 ratio, including buffers 8% CET1
Slide 17: Agenda
1 China Bank Profile 2 2020 Performance 3 Leadership Team 4 Awards and Recognitions 5 Appendix 17
Slide 18: 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. Rosemarie C. Gan Patrick D. Cheng Executive Vice President and Chief Executive Vice President and Segment Executive Vice President and
Slide 19: Agenda
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: Agenda
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 SM Investments 23% 26% Sysmart Corp 15% SM Group 39% Sy Family 1% Retail Ban
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 Balance Sheet December 31, June 30, YoY June 30, 2021 In Php Billion, except % 2020 2020 % Liquid assets 177 205 150 18% Investment securities 238 236 213 12% Net loans 576 557 580 (1%) Other assets 36 38 39 (7%) Total assets 1,027 1,036 982 5% Deposit liabilitie
Slide 28: Financial Highlights – Income Statements
Financial Highlights – Income Statements Income Statements Jan-Jun Jan-Dec Jan-Jun YoY In Php Billion, except % 2021 2020 2020 % Interest income 22.4 47.1 24.2 (8%) Interest expense (3.8) (13.3) (8.0) (52%) Net interest income 18.6 33.8 16.2 14% Fee-based income 6.3 10.0 4.7 32% Net revenues 24.8 43
Slide 29: Financial Highlights – Segment Information
Financial Highlights – Segment Information For the year ended June 30, 2021 Lending Retail Financial Others Total In Php million Business Banking Markets Net interest income 5,580 9,352 1,549 2,076 18,557 Fee-based income 560 1,207 3,820 693 6,280 Total revenue 6,140 10,559 5,369 2,769 24,838 Operat