China Banking Corp. · PSE:CBC
China Banking — Q1 2021 Earnings Presentation
29 slides from China Banking's earnings presentation, March 2021
Slide 1: Investor Presentation: Jan-Mar 2021 Performance
INVESTOR PRESENTATION Jan-Mar 2021 Performance
Slide 2: Agenda
1 China Bank Profile 2 2020 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 Compliant with health standards of DOH, DOLE, Almost 100% of branches open for operations DTI, and IATF • Detection, contact tracing, testing, isolation & referral Working closely with clients in the most challenged • Housekeeping
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 Profile and Credit Ratings
China Bank Profile EQUITY PROFILE CREDIT RATINGS Particulars March 31, 2021 Investment grade credit rating of Baa2 from May 2017 Ticker CHIB Same level as the Philippine sovereign Stock Price 23.05 rating and at par with the country’s three Market Cap (in PHP Mn) 61,910 biggest banks Market Cap
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 PHP500 million Business Center Acquire
Slide 7: 2020 Performance
1 China Bank Profile 2 Jan-Mar 2021 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 1Q2021? In Php Billions, except % +61% +40% +6% 0.4 +5.4x 1 Tn 572 Bn 817 Bn 109 Bn 1.8 Gross +24% Assets Deposits Equity 3.7 Loans 0.1 3.6 2.2 +2% -3% +4% +12% Net Income Net Operating Provisions Income Net Income 1Q2020 Revenues Expenses Tax 1Q2021 • Gr
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 3.4 2.7 2.6 2.5 12.1 2.3 +61% 10.1 8.1 7.5 2.7 2.7 6.5 2.4 2.2 1.9 2.0 1.7 3.6 2.2 2016 2017 2018 2019 2020 1Q2
Slide 10: NIM performance driving revenue growth
NIM performance driving revenue growth 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 6% Lending 5.0 Business 29% 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 1.5 1.7 1.
Slide 11: Capitalized on favorable market conditions
Capitalized on favorable market conditions Higher trading gains offset flattish fee income Fee-based Income Fee-based Income (In PHP Bn) 5 +3.1X Others Lending 9% Business 3.6 8% 4 Retail Banking 16% 3 2.2 2 1.2 1.4 Financial 1.3 1 Markets 67% (0.2) -1 1Q20 1Q21 Fee income Trading and securities gai
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 (%) 8,869 4.3 3.7 2.1 2.0 1.9 +5.4x 1.7 1.7 3.8 2,570 2,218 2.5 2.3 1.9 851 1.4 1.5 754 1.2 412 141 2016 2017 2018 2019 2020 1Q20 1Q21 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 8 +6% 1Q20 1Q21 6.2 5.8 6 2.7 -2% 2.8 4 64% 49% 0.5 +18% 0.4 1.1 +4% 2 1.0 +17% 1.6 1.9 0 1Q20 1Q21 Manpower Taxes Occupancy Others So
Slide 14: Continues to grow in the secured consumer lending space
Continues to grow in the secured consumer lending space Consumer loans now 20% of gross loans Well-secured Consumer Lending Portfolio Gross Loans (In PHP Bn) Consumer Loans Breakdown as of Mar-2021 2016-2020 CAGR -3% 700 17% 8% 592 600 578 572 572 Credit cards Personal 1% loans 513 14% 107 +7% 107 1
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) +4% 1.32 1.29 835 1.23 1.24 817 775 785 1.16 722 1.07 1.00 0.5 635 0.6 366 311 0.6 0.6 364 375 0.5 542 321 0.5 0.5 292 265 505 0.8 469 0.7 412 409 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 15% 0.17% 0.01% 14.53% 0.55% 13.82% 13% Enough capital buffer: to absorb credit shock; to support Asset growth; and to continue dividend distribution to 11% shareholders Minimum CET 1 ratio, 9% including buffers CET1 Ratio, 1Q
Slide 17: Leadership Team
1 China Bank Profile 2 2020 Performance 3 Leadership Team 4 Awards and Recognitions 5 Appendix 17
Slide 18: Highly Regarded Management Team
Highly Regarded 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: Awards and Recognitions
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: Appendix
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 27% SM Investment 23% SM Group Sysmart Corp 15% 38% Retail Banking Property
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 Highlights March 31, December 31, March 31, YoY In Php Billion, except % 2021 2020 2020 Inc(dec) Liquid assets 207 205 122 71% Investment securities 204 236 243 (16%) Net loans 555 557 584 (5%) Other assets 37 38 36 2% Total Assets 1,003 1,036 984 2
Slide 28: Financial Highlights – Income Statements
Financial Highlights – Income Statements Income Statements Jan-Mar Jan-Dec Jan-Mar YoY In Php Billion, except % 2021 2020 2020 Inc(dec) Interest income 11.2 47.1 12.1 (8%) Interest expense (2.0) (13.3) (4.2) (52%) Net interest income 9.2 33.8 7.9 16% Fee-based income 3.6 10.0 1.2 3.1x Net revenues 1
Slide 29: Financial Highlights – Segment Information
Financial Highlights – Segment Information For the year ended March 31, 2021 Lending Retail Financial Others Total In Php million Business Banking Markets Net interest income 2,621 4,991 530 1,035 9,177 Fee-based income 291 552 2,389 330 3,562 Total revenue 2,912 5,543 2,919 1,365 12,739 Operating e