China Banking Corp. · PSE:CBC
China Banking — FY2021 Earnings Presentation
38 slides from China Banking's earnings presentation, Mar 4, 2022
Slide 1: China Banking Corporation Investor Analysts' Briefing Presentation
China Banking Corporation INVESTOR ANALYSTS’ BRIEFING PRESENTATION Full Year 2021 Results 9M 2021 Performance March 4, 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 Christopher Ma. Carmelo Patrick D. Cheng Gerald O. Florentino Domini S. Velasquez Y. Salazar Chief Finance Officer IR Head Chief Economist Treasurer 3
Slide 4: Reminders
Reminders The briefing will be recorded. 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 4
Slide 5: Macroeconomic Outlook
Macroeconomic Outlook THE BEST BANK IN THE COUNTRY
Slide 6: Macroeconomic Overview
Macroeconomic Overview FY 2020A FY 2021A FY 2022F GDP growth (%) -9.6 5.6 7.1 Inflation (%) 2.4 3.9 3.5 Policy rate (end, %) 2.0 2.0 2.5 10-Year BVAL Rate (end, %) 3.00 4.82 5.91 USDPHP (end) 48.0 51.0 52.6 USDPHP (ave) 49.6 49.3 52.0 6
Slide 7: Macroeconomic Outlook
Macroeconomic Outlook Pick up in consumption Public spending will normalize; despite Omicron surge; Inflationary pressures such as high Better employment outlook; commodity prices (oil, fertilizers, corn); Election-related spending; and Geopolitical tensions over Ukraine; Broad-based r
Slide 8: FY2021 Financial Performance
FY2021 Financial Performance 8
Slide 9: 2021 Performance Highlights
2021 Performance Highlights Sustained profitability Continued growth P15.1 Bn net income (+25% YoY) Strong CASA growth (+18% YoY) 10 consecutive quarters of NII growth Disciplined Loan growth (+9% YoY) Robust capital position Better than industry asset quality ratios Strong internal capital generati
Slide 10: 2021 Financial Highlights
2021 Financial Highlights INCOME STATEMENTS Jan-Dec Jan-Dec YoY Growth In Php billion , except % 2021 2020 Net interest income 38.3 33.8 13% Fee-based income 10.4 10.0 3% Total revenue 48.7 43.9 11% Operating expenses (22.3) (21.5) 4% Income before provisions and taxes 26.3 22.3 18% Provision for im
Slide 11: 2021 Financial Highlights
2021 Financial Highlights BALANCE SHEETS Dec-2021 Dec-2020 YoY Growth In Php billion, except % Total Assets 1,112 1,036 7% Investment Securities 279 236 18% Net Loans 609 557 9% Deposits 863 835 3% CASA 555 469 18% Time Deposits 308 366 -16% Total Equity 119 105 13% 11
Slide 12: Sustained profitability amidst a challenging environment
Sustained profitability amidst a challenging environment 18 13.6% 14% CHIB is the only major bank with a consistently higher profitability over 12.1% 16 15.1 +25% YoY 12% the last 5 years 11.0% 14 10.0% 9.5% 12.1 10% 12 10.1 10 8% Quarterly Net Income (In PHP Bn) 8.1 +3% vs 4Q20 8 7.5 6% 3.8 3.9 3.9
Slide 13: Resilient NII despite pressure on yields
Resilient NII despite pressure on yields NIM stabilizes above 4% Net interest income continues to grow Q-on-Q Net Interest Income (In PHP Bn) +13% YoY 42 6.2% 40 38.3 38 5.5% 5.5% 36 33.8 34 5.1% 5.0% 5.0% 5.0% 32 30 28 26.1 26 24 4.2% 4.2% 4.2% 4.2% 22 +13% vs 4Q20 3.9% 20 3.6% 3.4% 18 16 +5% vs 3Q
Slide 14: Fee-based income driving revenue growth
Fee-based income driving revenue growth Fee income recovers to pre-pandemic level Fee-based Income (In PHP Bn) 12.0 +3% YoY 10.4 10.0 10.0 Core fee income grew 39% YoY to P6.4 billion. This was 8.4 3% better than the pre-pandemic fee income of P6.2 4.0 8.0 billion (FY2019). 2.3 5.4 Service charg
Slide 15: Absorbed substantial provision for credit losses
Absorbed substantial provision for credit losses Ramped up provisions on COVID-19 impact NPL has stabilized; NPL cover remains sufficient Provisions (In PHP Mn) 180% 15.0% 167% 160% 13.0% Flat YoY 140% 129% 128% 11.0% 126% 8,869 8,877 120% 116% 9.0% 100% 99% 108% 89% 7.0% 94% 95% 80% 5.0% 4.1% 60% 3
Slide 16: 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) +4% YoY 2019 2020 2021 22.3 21.5 Headcount 9,813 9,825 9,747 20.3 Branches 631 634 637 ATMs 1,002 1,022 1,037 Cost-to-income ratio 59% > 49% > 46% Co
Slide 17: Disciplined loan growth
Disciplined loan growth Continued expansion in consumer and corporate segments Well-secured consumer lending portfolio Gross Loans (In PHP Bn) Consumer Loans Breakdown, Dec-2021 vs Dec 2020 +9% YoY 2017-2021 CAGR Dec-2021 700 13% 7% 624 Unsecured 600 578 572 loans 15% 123 +7% YoY 513 107 14% 500 456
Slide 18: Deposit growth primarily driven by CASA
Deposit growth primarily driven by CASA Strong CASA growth and improving funding mix Improving CASA per branch Deposits (In PHP Bn) Deposits per branch (In PHP Bn) 1,200 64% 68% 56% 56% 1.35 54% 53% 1.32 1,000 1.23 863 1.16 835 48% 1.07 0.48 800 775 722 0.58 635 308 -16% YoY 0.58 0.52 366 600 28% 0.
Slide 19: Strong internal capital generation results to higher capital buffer
Strong internal capital generation results to higher capital buffer 2.3% Enough capital buffer: 16% 0.4% to absorb credit shock; 0.2% to support Asset growth; and 14.9% 1.0% 14% to sustain dividend payment to shareholders 13.8% 15.7% 14.2% 14.7% 12% 13.7% 0.8% 0.8% 13.1% 0.9% 0.9% 0.9% 10% 14.
Slide 20: Digital Initiatives
Digital Initiatives THE BEST BANK IN THE COUNTRY
Slide 21: Digital Banking
DIGITAL BANKING +112% full-year 2021 vs pre-pandemic Transactions 2y CAGR Adopting a rapid shift into digital to navigate the “new normal” ways of retail banking +58% Active Users 2y CAGR 43% share of digital to +33% total transactions Enrollments as of Dec’21 2y CAGR +88% significant increase versu
Slide 22: Awards and Recognitions
Awards and Recognitions THE BEST BANK IN THE COUNTRY
Slide 23: 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 24: 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 25: Other Citations
Other Citations Mobile Banking & Apo Agua Infrastructure Atlantic Gulf and Pacific Top Corporate Issue Company Php6 Billion 2nd Strongest Bank in the Payment Initiative of the Top Corporate Securities Php9 Billion financing Manager / Arranger term loan Philippines Year Market Makers and Top Investme
Slide 26: In summary, CHIB continues to be..
In summary, CHIB continues to be.. 2019 2020 2021 Return on Equity 11.0% > 12.1% > 13.6% Profitable Return on Assets 1.1% > 1.2% > 1.5% CET 1 Ratio 12.8% > 13.8% > 14.9% Adequately-capitalized Capital Adequacy Ratio 13.7% > 14.7% > 15.7% NPL Ratio 1.5% > 2.3% > 2.5% Well-managed NPL Coverage Ratio 1
Slide 27: Q & A
Q&A Please click the “Raise Hand” button to be recognized. You may also send questions thru the chat box. 27
Slide 28: Additional Information
Additional Information THE BEST BANK IN THE COUNTRY
Slide 29: Our response to COVID-19
Our response to COVID-19 EMPLOYEES CLIENTS AND COMMUNITY Almost 100% of branches open for operations 97% of employees fully vaccinated, 35% given booster shots Working closely with clients in the most challenged sectors Compliant with health standards of DOH, DOLE, DTI, and IATF • Detection,
Slide 30: 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 31: China Bank Profile
China Bank Profile EQUITY PROFILE CREDIT RATINGS Particulars March 3, 2022 Investment grade credit rating of Baa2 with stable outlook from May 2017 Ticker CHIB Same level as the Philippine sovereign rating Stock Price Php27.30 and at par with the country’s three biggest banks Market Cap (in PHP
Slide 32: 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 33: 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 34: Financial Highlights – Balance Sheets
Financial Highlights – Balance Sheets BALANCE SHEETS 2021 2020 Dec-21 Dec-20 Dec-19 in Php billions, except % vs 2020 vs 2019 Liquid Assets 188 205 144 -8% 42% Investment Securities 279 236 213 18% 11% Net Loans 609 557 569 9% -2% Other Assets 36 38 37 -5% 5% Total Assets 1,112 1,036 962 7% 8% Depos
Slide 35: Financial Highlights – Income Statements
Financial Highlights – Income Statements INCOME STATEMENTS Jan-Dec Jan-Dec Jan-Dec 2021 2020 in Php billions, except % 2021 2020 2019 vs 2020 vs 2019 Interest income 45.7 47.1 47.7 -3% -1% Interest expense (7.4) (13.3) (21.6) -44% -39% Net interest income 38.3 33.8 26.1 13% 30% Fee-based income 10.4
Slide 36: Financial Highlights – Quarterly Income Statements
Financial Highlights – Quarterly Income Statements INCOME STATEMENTS 4Q21 vs 4Q2020 1Q2021 2Q2021 3Q2021 4Q2021 In Php billions, except % 4Q20 Interest income 11.5 11.2 11.2 11.4 11.9 4% Interest expense (2.5) (2.0) (1.8) (1.8) (1.8) -26% Net interest income 8.9 9.2 9.4 9.7 10.1 13% Fee-based income
Slide 37: 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 38: Thank You!
Thank You! ASC Ref No. C010P013122CS THE BEST BANK IN THE COUNTRY