China Banking Corp. · PSE:CBC
China Banking — Q1 2023 Earnings Presentation
32 slides from China Banking's earnings presentation, May 9, 2023
Slide 1: China Banking Corporation Analysts' Briefing 1Q 2023 Results
China Banking Corporation ANALYSTS’ BRIEFING 1Q 2023 Results May 09, 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 Outlook: China Bank's view
Macroeconomic Outlook China Bank’s view POLICY . 6 25 %2022 INFLATION 5.8% from 5.8% in FY 2022 RATE & FX +425 bps since May GDP 5.8% from 7.6% in FY 2022 BSP to pause at its May meeting High inflation and interest rates Inflation will move downward; will weigh on growth expected to fall to ≤4
Slide 7: Macroeconomic Outlook
Macroeconomic Outlook China Bank’s view FY 2022A Q12023A FY 2023F FY 2024F GDP growth (%) 7.7 6.8F 5.8 5.5 Inflation (%) 5.4 8.3 5.8 2.9 Policy rate (end, %) 5.50 6.25 5.75 4.50 10-Year BVAL Rate (end, %) 6.994 6.216 5.3 4.3 USDPHP (end) 55.755 54.360 55.6 51.4 Key Takeaways 1. Moderate economic gro
Slide 8: 1Q 2023 Financial Performance
1Q 2023 Financial Performance
Slide 9: 1Q 2023 Performance Highlights
1Q 2023 Performance Highlights We delivered strong returns. P5.0 billion 14.7% 1.5% Profitability 1Q’23 Net income Return on Equity Return on Assets We maintained Growtha quality balance sheet and prudent risk management. 2.3% 118% NPL Ratio NPL Coverage Ratio We sustained a solid capital position a
Slide 10: 1Q 2023 Financial Highlights
1Q 2023 Financial Highlights INCOME STATEMENTS 1Q'23 vs 1Q'23 vs 1Q 2022 4Q 2022 1Q 2023 In Php billions, except % 1Q'22 4Q'22 Interest income 12.6 16.7 18.4 46% 11% Interest expense (1.9) (4.8) (5.7) 207% 20% Net interest income 10.8 11.9 12.7 18% 7% Fee-based income 1.7 1.8 0.5 -72% -73% Total rev
Slide 11: 1Q 2023 Financial Highlights
1Q 2023 Financial Highlights BALANCE SHEETS Mar 31, Dec 31, Mar 31, Mar'23 vs Mar'23 vs in Php billions, except % 2022 2022 2023 Mar'22 Dec'22 Liquid Assets 153 178 146 -5% -18% Investment Securities 321 412 455 42% 10% Net Loans 616 700 709 15% 1% Other Assets 37 40 41 12% 3% Total Assets 1,127 1,3
Slide 12: Sustained profitability amidst a challenging environment
Sustained profitability amidst a challenging environment Quarterly Net Income (In PHP Bn) 8 +3% vs 1Q22 6 +13% vs 4Q22 5.2 4.9 5.0 4.6 4.4 1Q’23 Net income 4 breached the P5-billion mark on strong NII growth. 2 Trailing 12-month EPS at P7.2/share vs. P6.1/share in 1Q’22 0 1Q22 2Q22 3Q22 4Q22 1Q23 12
Slide 13: 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) +18% vs 1Q22 6.27% 6.12% 14.0 15 consecutive 12.7 +7% vs 4Q22 5.52% +84 bps quarters of growth 11.7 11.9 12.0 (since 3Q19) 5.28% 11.2 5.09% 10.8 10.3 9
Slide 14: 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) 20 16 3.0 0.3 12 2.8 3.3 0.3 12.7 ≈60% of 10.8 loans are Cost of funds 8 re-pricing up 119 bps YoY Loans and investment securities grew 15% 4 and 42%, respectively. 0 Net Interest Ch
Slide 15: Fee-based income remains strong
Fee-based income remains strong Core Fee income continues to grow Fee-based Income (In PHP Bn) 6.0 5.0 4.0 Core fee income grew 10% YoY to P1.4 billion. 3.8 1.8 Service charges, fees, and commissions were up 9% to 2.0 1.7 1.5 0.5 0.4 - 0.2 P750 million due to higher deposits, loans and 1.5 1.5 1
Slide 16: Stable asset quality and sufficient NPL cover
Stable asset quality and sufficient NPL cover Stable asset quality results to lower provisions NPL ratio has stabilized; NPL cover remains adequate Provisions (In PHP Bn) 13.0% 140% 129% 128% 123% 116% 118% 11.0% 120% 8.9 8.9 9.0 9.0% 108% 106% 100% 94% 95% 7.0% 89% 80% 5.0% 60% 2.6 4.1% -44% YoY 3.
Slide 17: Operating expenses impacted by persistently high inflation
Operating expenses impacted by persistently high inflation Operating Expenses ex provisions (In PHP Bn) .0 +19% YoY .0 +7% QoQ .0 6.9 6.8 .0 6.4 5.7 Manpower Volume-related taxes higher due to .0 +22% YoY 5.4 2.4 2.3 higher operating income and bigger deposit .0 2.3 balances. Taxes and licenses 1.
Slide 18: Sustained loan growth
Sustained loan growth Continued expansion in both consumer and corporate segments Well-secured consumer lending portfolio Gross Loans (In PHP Bn) Consumer Loans Breakdown, Mar-2023 +15% YoY 2019-2022 CAGR 13% 718 727 7% 624 632 144 154 +23% YoY 578 572 Auto 125 Housing 12% 123 107 114 59% 573 574 50
Slide 19: Strong Deposit growth
Strong Deposit growth CASA eases but still above pre-pandemic level Deposits per branch (In PHP Bn) Deposits (In PHP Bn) +24% YoY 1,066 1,086 1.67 1.69 863 879 835 1.35 1.38 775 492 1.32 543 1.23 +72% YoY 0.77 0.85 308 315 0.48 0.50 366 364 0.58 0.58 -4% YoY 555 573 564 543 0.87 0.90 0.89 469 0.85 4
Slide 20: Strong internal capital generation results to higher buffer
Strong internal capital generation results to higher buffer Enough capital buffer: to absorb credit shock; 15.8% 15.9% 16.3% to support Asset growth; and 14.7% 0.9% 0.9% 0.8% to sustain dividend payment to shareholders 13.7% 0.9% 0.9% Total Dividends Paid (in PHP billions) +2.2X vs 2019 +27% Y
Slide 21: Digital Banking
Digital +49% Banking Digital TXNs year-on-year Retail, 1Q‘23 vs 1Q‘22 Bringing our signature touch in relationship banking to our +29% customers anytime, anywhere. O/S Active Users year-on-year +34% O/S Enrollments ≈73% year-on-year share of digital & e-banking to total TXNs Jan-Mar 2023 +39% Gross
Slide 22: Awards & Distinctions
Awards & Distinctions The Bank also received the Five-Golden Arrow Recognition, the highest corporate governance award given by the Institute of China Bank was recognized by the ASEAN Capital Markets Forum Corporate Directors 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.. 1Q'22 FY2022 1Q'23 Return on Equity 16.0% 15.1% 14.7% Profitable Return on Assets 1.7% 1.6% 1.5% CET 1/Tier 1 Ratio 15.5% 15.1% 15.4% Adequately-capitalized Capital Adequacy Ratio 16.3% 15.9% 16.3% NPL Ratio 2.4% 2.3% 2.3% Well-managed NPL Coverage Ratio 121% 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: Equity Profile and Credit Ratings
China Bank Profile EQUITY PROFILE CREDIT RATINGS Particulars May 3, 2023 Investment grade credit rating of Baa2 with stable outlook from May 2017 Ticker CHIB Same level as the Philippine sovereign rating Stock Price Php32.20 and at par with the country’s three biggest Market Cap (in PHP Mn) 86,6
Slide 29: China Bank Profile: Corporate Milestones
China Bank Profile Corporate Milestones 2007 Acquired Manila Bank 2020 2022 and operated it as China 2018 Bank Savings (CBS); 2014 Raised P15 billion via Entered into a 2016 Infused P500 million to fixed-rate retail bonds; Became the 4th largest* Acquired Plantersbank CBS and P40 million to bank in
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 Romeo D. Uyan, Jr. Chairman of the Board Vice Chairman of the Board President and Chief Executive Officer Patrick D. Cheng Aloysius C. Alday, Jr. Jose L. Osmeña, Jr. Executive Vice President and Chief Executive Vice President and Head of Execu
Slide 32: Thank You!
Thank You! 32