China Banking Corp. · PSE:CBC
China Banking — Q1 2024 Earnings Presentation
35 slides from China Banking's earnings presentation, May 7, 2024
Slide 1: Analysts' Briefing 1Q 2024 Results
Analysts’ Briefing 1Q 2024 Results May 7, 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: 1Q 2024 Financial Performance
1Q 2024 Financial Performance 4
Slide 5: 1Q 2024 Financial Highlights
1Q 2024 Financial Highlights P5.9 Bn 15.5% 15.3% P57.35 1Q’2024 Net Income Return on Equity CET-1 Ratio Book value per share 1Q2024 Net income grew 18% to P5.9 billion; Income Resilient NII despite pressure on funding cost; NIM improved by 22 bps Statement YoY to 4.42% in 1Q’24; Provisions dec
Slide 6: 1Q 2024 Financial Highlights: Income Statements
1Q 2024 Financial Highlights INCOME STATEMENTS YoY 1Q 2023 1Q 2024 In Php billions, except % change Interest income 18.4 21.9 19% Interest expense (5.7) (6.9) 21% Net interest income 12.7 15.0 18% Fee-based income 0.5 0.1 -70% Total revenue 13.2 15.1 15% Operating expenses (6.8) (7.2) 6% Income befo
Slide 7: 1Q 2024 Financial Highlights: Balance Sheets
1Q 2024 Financial Highlights BALANCE SHEETS YoY Mar 2023 Mar 2024 in Php billions, except % change Liquid Assets 146 120 -18% Investment Securities 455 552 21% Net Loans 709 786 11% Other Assets 41 48 16% TOTAL ASSETS 1,352 1,506 11% Deposits 1,086 1,229 13% CASA 543 553 2% Time Deposits 543 676 24%
Slide 8: Sustained profitability amidst a challenging environment
Sustained profitability amidst a challenging environment Quarterly Net Income (In PHP Bn) +18% vs 1Q23 +2% vs 4Q23 5.8 5.8 5.9 5.2 5.4 4.9 5.0 4.6 4.4 5th consecutive quarters of breaching the P5-billion net income mark. 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 8
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) +18% vs 1Q23 +4% vs 4Q23 6.12% 6.32% 6.46% 6.50% 6.47% -3 bps vs 4Q23 16.0 19 consecutive 14.4 15.0 14.0 quarters of growth 13.6 5.52% 5.28% (since 3Q1
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) 20 +18% YoY 0.6 16 0.5 1.3 0.02 2.2 Gross yield Cost of funds 15.0 up 16 bps up 35 bps YoY 12 12.7 YoY Loans and investment securities grew 11% and 21%, 8 respectively. 4 0 Net Inter
Slide 11: Core fee-based income remains strong
Core fee-based income remains strong Fee-based Income (In PHP Mn) 2240.4449 2235.964 2231.4831 2227.0022 2222.5213 2218.0404 2213.5596 2209.0787 2204.5978 2200.1169 2195.636 2191.1551 2186.6742 2182.1933 2177.7124 2173.2315 2168.7507 2164.2698 2159.7889 2155.308 2150.8271 2146.3462 2141.8653 2137.38
Slide 12: Demonstrated operational resiliency amidst high inflation
Demonstrated operational resiliency amidst high inflation Operating Expenses ex provisions (in PHP Bn) 8.0 +6% 7.2 6.8 6.8 6.9 6.5 Others 6.0 2.3 +12% YoY 2.1 1.8 2.1 1.7 Volume-related taxes higher due to bigger deposit balances Depreciation 0.4 0.5 0.4 0.6 0.5 +11% YoY 4.0 0.7 0.8 0.7 0.7 0.7
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% 143% 140% 11.0% 129% 128% 8.9 8.9 9.0 123% 116% 120% 9.0% 104% 108% 100% 103% 101% 7.0% 94% 95% 89% 80% 5.0% 60%
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, March 2024 +11% YoY Auto 791 805 718 727 181 192 +25% YoY Housing 12% P192 624 144 154 572 123 57% Bn 114 Unsecured +7% YoY 574 6
Slide 15: Strong Deposit growth
Strong Deposit growth CASA inched up but still above pre-pandemic level Deposits per branch (In PHP Bn) Deposits (In PHP Bn) +13% YoY 1,229 1.90 1,187 1.83 1,086 1.67 1.69 1,066 863 1.32 1.35 835 611 676 0.94 1.04 492 543 +24% YoY 0.77 0.85 308 0.48 366 0.58 Pre-pandemic CASA level 555 573 575 543 5
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; 16% 0.3% 0.7% 0.3% to support AssetCapital growth;Ratios and 15.3% 15.3% 0.7% to sustain dividend payment to shareholders 14.6% 14% 15.9% 16.1% 16.2% 15.8% 14.7% 0.8% 0.9% 0.9% 0.9% 0.9%
Slide 17: Increasing dividend payments to Shareholders
Increasing dividend payments to Shareholders 8.00 29% 30% 27% 27% 27% 27% 7.00 25% 22% +16% 5.9 6.00 27% 5.1 20% 5.00 2024 Dividend Payout 4.0 4.00 15% 3.00 2.4 2.7 2.7 2.20 10% 6.0% 1.90 2024 Dividend Yield* 2.00 1.50 1.00 1.00 5% 0.88 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 • Enhanced loan pricing model (clients to access both sides of the balance sheets) • Increased contributions from auxiliary businesses (FX, Trust and Capital markets) • Strengthened Management Team with internal and external hires • Increased digital investments 18
Slide 19: In summary, Chinabank continues to be..
In summary, Chinabank continues to be.. FY2022 FY2023 1Q'23 1Q'24 Return on Equity 15.1% 15.5% 14.7% 15.5% Profitable Return on Assets 1.6% 1.6% 1.5% 1.6% CET 1/Tier 1 Ratio 15.1% 15.3% 15.4% 15.3% Adequately- 510.0% 510.0% capitalized Capital Adequacy Ratio 15.9% 16.1% 16.3% 16.2% 31.3653 3154.0% 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 - 2022 2007. Acquired Manila Bank and 2020. Raised P15 Bn via fixed- operated it as China Bank rate retail bonds; Celebrated Savings; 100 years and restored Binondo Business Center Entered into a bancassurance JV 2021. Raised P20 Bn via fix
Slide 23: Company Profile
Company Profile Extensive Distribution Channels* Subsidiaries & Affiliates 648 1,071 10,704 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 March
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 1Q’24 vs 1Q’23 Bringing our signature touch in relationship banking to our +27% customers anytime, O/S Active Users anywhere. year-on-year +26% O/S Enrollments ≈72% year-on-year share of digital & e- +30% banking to total TXNs 1Q’24 Gross TXN Value year
Slide 26: Awards & Distinctions
Awards & Distinctions 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 Chinabank is the best governed bank for 2 years in a row and still the only People Management Association of bank awarded wit
Slide 27: Other Citations
Other Citations Chinabank 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 Phil
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) CHIB PM I CHIB.PS 2022 2023 1Q24 Par value (PHP) 10.00 Book value per share 50.0 55.8 57.4 Outstanding shares 2,691,340,312 Earnings per share 7.1 8.2 8.5 Stock price as of April 30, 2024 39.10 Price to
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
Historical Financial Highlights BALANCE SHEETS Mar 24 vs Mar 24 vs Dec 2019 Dec 2020 Dec 2021 Dec 2022 Dec 2023 Mar 2023 Mar 2024 in Php billions, except % Mar 23 Dec 23 Liquid Assets 144 205 188 178 155 146 120 -18% -22% Investment Securities 213 236 279 412 505 455 552 21% 9% Net Loans 569 557 609
Slide 33: Historical Financial Highlights
Historical Financial Highlights INCOME STATEMENTS 1Q'24 vs FY2019 FY2020 FY2021 FY2022 FY2023 1Q2023 1Q2024 In Php billions, except % 1Q'23 Interest income 47.7 47.7 46.5 57.2 79.4 18.4 21.9 19% Interest expense (21.6) (13.3) (7.4) (11.6) (25.8) (5.7) (6.9) 21% 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