China Banking Corp. · PSE:CBC
China Banking — 9M 2021 Earnings Presentation
24 slides from China Banking's earnings presentation, November 2021
Slide 1: Investor Presentation 9M 2021 Results
Investor INVESTORPresentation PRESENTATION 9M 2021 Results 9M 2021 Performance
Slide 2: China Bank response to COVID-19
China Bank response to COVID-19 EMPLOYEES CLIENTS AND COMMUNITY 64% of employees fully vaccinated, 86% given 1st dose (As of October 25, 2021) Almost 100% of branches open for operations Compliant with health standards of DOH, DOLE, DTI, and IATF Working closely with clients in the most chal
Slide 3: 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 4: China Bank Profile: Equity Profile and Credit Ratings
China Bank Profile EQUITY PROFILE CREDIT RATINGS Particulars November 17, 2021 Investment grade credit rating of Baa2 from May 2017 Ticker CHIB Same level as the Philippine sovereign rating Stock Price Php25.30 and at par with the country’s three biggest banks Market Cap (in PHP Mn) 67,995 Marke
Slide 5: Corporate Milestones
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 6: China Bank at a glance
China Bank at a glance In Php Billions, except % +35% +15% +2% +3% +122% 0.3 0.2 4.7 1.2 P1.055 P612 P849 P114 Trillion Billion Billion Billion 11.2 8.3 Assets Gross Loans Deposits Equity YoY +4% +3% +3% +13% Net Income Net Operating Provisions Income Net Income 9M 2020 Revenues Expenses Tax 9M 2021
Slide 7: Sustained profitability amidst a challenging environment
Sustained profitability amidst a challenging environment +35% YoY 12 16% 11.2 13.4% 13.6% 13.4% 14% Net interest income up 13% to P28.2 billion driven 10 12.1% primarily by lower funding costs. 11.2% 12% 8.3 The significant reduction in interest expense led to an 8 improved net interest margin o
Slide 8: Resilient NII despite pressure on yields
Resilient NII despite pressure on yields NIM stabilizes at above 4% Net interest income continues to grow Quarter-on-Quarter Net Interest Income (In PHP Bn) +13% YoY 30 28.2 6.2% 28 26 24.9 5.5% 5.5% 24 5.1% 5.0% 5.0% 22 20 18 4.2% 4.2% 4.2% 16 +12% vs 3Q20 3.9% 14 3.6% 3.4% +3% vs 2Q21 12 9th conse
Slide 9: 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) +19% YoY 8.4 Fee income grew 40% YoY to P4.4 billion. This was 7% better than the pre-pandemic fee income of P4.1 billion (9M 2019). 7.0 Service charges, fees, and commissions were up 2
Slide 10: Absorbed substantial provision for credit losses
Absorbed substantial provision for credit losses Ramped up provisions on COVID-19 impact NPL cover remains sufficient Provisions (In PHP Mn) 6.0% 180% 167% 8,869 160% 5.0% 140% +3% YoY 129% 128% 6,505 120% 6,315 106% 4.0% 99% 91% 100% 87% 3.4% 80% 3.0% 2.5% 60% 2,570 2.3% 1.9% 40% 2.0% 1.5% 851 754
Slide 11: 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) 70% 2.4% +2% YoY 62% 63% 61% 59% 60% 2.3% 2.3% 16.6 2.3% 16.3 49% 50% 45% 2.3% 6.8 +1% 2.2% 6.8 40% 2.2% 2.2% Primarily due to the increase in regula
Slide 12: 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 Sep-2021 +3% YoY 2016-2020 CAGR 700 17% 8% 612 595 600 578 572 Credit cards Personal loans 1% 15% 513 107 105 118 +12% YoY 114 500 45
Slide 13: Deposit growth primarily driven by CASA
Deposit growth primarily driven by CASA Strong retail base Improving CASA per branch Deposits (In PHP Bn) Deposits per branch (In PHP Bn) +3% YoY 1.32 1.34 1.31 835 849 827 1.23 775 1.16 722 1.07 1.00 0.5 635 321 0.6 366 0.6 396 0.6 364 0.5 542 321 0.5 0.5 292 265 0.8 529 0.7 469 0.6 0.7 0.7 401 412
Slide 14: Strong internal capital generation results in higher capital buffer
Strong internal capital generation results in higher capital buffer Enough capital buffer: to absorb credit shock; CET 1/Tier 1 Tier 2 CAR to support Asset growth; and to continue dividend distribution to shareholders 15.3% 14.7% 14.2% 0.9% 13.7% 0.9% 16% 0.8% 13.1% 0.9% 1.70% 0.41% 0.05% 12.2
Slide 15: 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 16: 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 17: Other Citations
Other Citations Atlantic Gulf and Pacific China Bank Corporation Mobile Banking & Apo Agua Infrastructure Company Php6 Billion P30 Billion Fixed Rate 2nd Strongest Bank in the Payment Initiative of the Php9 Billion financing term loan Retail Bond Philippines Year Best Bond Adviser Philippines Utilit
Slide 18: Thank you!
Thank you! 18
Slide 19: Strategic plans in place to deliver on our targets
Strategic plans in place to deliver on our targets 19
Slide 20: Digital Banking: Relationship-driven Transformation
Digital Banking: Relationship-driven Transformation Focus on Digital Payments, even pre-Covid Channel Enrollments active 300 2019 – September 2021 (in thousands) 44% Recognized by BSP as active partner in digital economy Pilot bank in Instapay 269 1 of 4 pilot banks for InstaPay to mobile/ e-m
Slide 21: 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 22: Financial Highlights – Balance Sheet
Financial Highlights – Balance Sheet September 30, December 31, September 30, YoY In Php Billion, except % 2021 2020 2020 change Liquid assets 195 205 172 13% Investment securities 232 236 222 5% Net loans 592 557 581 2% Other assets 36 38 38 (4%) Total assets 1,055 1,036 1,013 4% Deposit liabilitie
Slide 23: Financial Highlights – Income Statements
Financial Highlights – Income Statements Jan-Sep Jan-Dec Jan-Sep YoY In Php Billion, except % 2021 2020 2020 change Interest income 33.8 47.1 35.7 (5%) Interest expense (5.6) (13.3) (10.8) (48%) Net interest income 28.2 33.8 24.9 13% Fee-based income 8.4 10.0 7.0 19% Net revenues 36.6 43.9 31.9 15%
Slide 24: Financial Highlights – Segment Information
Financial Highlights – Segment Information For the period-ended September 30, 2021 Lending Retail Financial Others Total In Php million Business Banking Markets Net interest income 8,443 14,213 2,135 3,426 28,218 Fee-based income 667 1,754 4,523 1,435 8,380 Total revenue 9,111 15,967 6,659 4,861 36,