China Banking Corp. · PSE:CBC
China Banking — Q1 2022 Earnings Presentation
37 slides from China Banking's earnings presentation, May 13, 2022
Slide 1: Investor Analysts' Briefing Presentation 1Q 2022 Results
China Banking Corporation INVESTOR ANALYSTS’ BRIEFING PRESENTATION 1Q 2022 Results 9M 2021 Performance May 13, 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 Patrick D. Cheng Gerald O. Florentino Domini S. Velasquez Chief Finance Officer IR 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 4
Slide 5: Macroeconomic Outlook
Macroeconomic Outlook THE BEST BANK IN THE COUNTRY
Slide 6: Macroeconomic Overview
Macroeconomic Overview Global outlook − Slower global GDP; − Elevated commodity prices and supply chain bottlenecks; and − Uneven pace of monetary policy tightening. Domestic outlook Robust recovery; Improvement in health outlook; − Inflation to curb spending; Better employment outlook; − Co
Slide 7: Macroeconomic Overview
Macroeconomic Overview FY 2020A FY 2021A Q1 2022 FY 2022F GDP growth (%) -9.6 5.6 8.3 6.9-7.3 Inflation (%) 2.4 3.9 3.4 4.5 Policy rate (end, %) 2.0 2.0 2.0 2.75 10-Year BVAL Rate (end, %) 3.00 4.82 5.54 6.4 USDPHP (end) 48.0 51.0 51.7 53.2 USDPHP (ave) 49.6 49.3 51.6 52.4 7
Slide 8: 1Q 2022 Financial Performance
1Q 2022 Financial Performance 8
Slide 9: 1Q 2022 Performance Highlights
1Q 2022 Performance Highlights • Increased profitability with 1Q 2022 Net income up 37% to P4.9 Billion YoY driven by sustained NII growth Profitability • Improved return on equity of 16.0% and return on assets of 1.7% • Prudent cost management led to an 8% drop in OPEX; improved cost-to-income rati
Slide 10: 1Q 2022 Financial Highlights
1Q 2022 Financial Highlights INCOME STATEMENTS 1Q22 vs 1Q22 vs 1Q2021 4Q2021 1Q2022 In Php billions, except % 4Q21 1Q21 Interest income 11.4 12.2 12.6 4% 11% Interest expense (2.0) (1.8) (1.9) 1% -8% Net interest income 9.3 10.3 10.8 4% 15% Fee-based income 3.4 1.8 1.7 -3% -50% Total revenue 12.7 12
Slide 11: 1Q 2022 Financial Highlights
1Q 2022 Financial Highlights BALANCE SHEETS Mar'22 vs Mar'22 vs Mar-21 Dec-21 Mar-22 in Php billions, except % Dec'21 Mar'21 Liquid Assets 207 188 153 -18% -26% Investment Securities 204 279 321 15% 57% Net Loans 555 609 616 1% 11% Other Assets 37 36 37 2% 0% Total Assets 1,003 1,112 1,127 1% 12% De
Slide 12: Sustained profitability amidst a challenging environment
Sustained profitability amidst a challenging environment Quarterly Net Income (In PHP Bn) 8 +37% vs 1Q21 6 +25% vs 4Q21 1Q2021 FY2021 1Q2022 4.9 Return on Equity 13.4% 13.6% 16.0% 3.9 3.9 4 3.6 3.7 Return on Assets 1.4% 1.5% 1.7% 2 Net Interest Margin 4.2% 4.2% 4.3% Cost-to-income ratio 49% 46% 46%
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) +15% vs 1Q21 6.2% 11 consecutive +4% vs 4Q21 quarters of growth 5.5% 5.5% (since 3Q19) 10.8 10.3 5.1% 5.0% 5.0% 5.0% 5.1% 9.9 9.6 9.3 8.7 8.9 8.3 7.9 7.6 4.2%
Slide 14: Fee-based income driving revenue growth
Fee-based income driving revenue growth Core Fee income continues to grow Fee-based Income (In PHP Bn) 4.0 3.5 3.4 3.0 2.5 Core fee income grew 13% YoY to P1.4 billion. 2.5 2.2 Trading gains declined by 85% YoY to P338 million. 2.0 1.9 1.3 1.8 1.7 0.0 0.6 Service charges, fees, and commissions
Slide 15: Stable asset quality and adequate cover results to lower provisions
Stable asset quality and adequate cover results to lower provisions Lower provisions from stable asset quality NPL has stabilized; NPL cover remains sufficient Provisions (In PHP Mn) 13.0% 180% 167% 160% 11.0% 129% 140% 128% 8,869 8,877 9.0% 119% 116% 120% 108% 7.0% 94% 95% 89% 100% 87% 5.0% 80% -65
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) -8% vs 1Q21 8 1Q2021 FY2021 1Q2022 Flat vs 4Q21 6 Headcount 9,822 9,747 9,680 6.2 5.5 5.7 5.7 4.9 4 Branches 634 637 636 2 ATMs 1,032 1,037 1,036 0 C
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, Mar-22 vs Mar-21 +10% YoY 2018-2021 CAGR Mar-22 12% 624 632 6% Unsecured 578 572 572 loans 123 126 +7% YoY 18% 513 107 114 118 18%
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) +8% YoY 1.35 1.38 863 879 1.32 835 1.28 817 1.23 775 1.16 722 0.49 315 +1% YoY 0.48 308 0.49 311 0.58 366 0.58 364 0.52 321 555 564 +12%
Slide 19: Strong internal capital generation results to higher capital buffer
Strong internal capital generation results to higher capital buffer 16% 0.70% 0.08% 0.56% Enough capital buffer: 0.25% 15.45% to absorb credit shock; 14.92% 14.88% to support Asset growth; and 14% to sustain dividend payment to shareholders 15.7% 16.3% 12% 14.7% 0.8% 13.7% 0.8% 13.1% 0.9% 0.9%
Slide 20: Digital Initiatives
Digital Initiatives THE BEST BANK IN THE COUNTRY
Slide 21: Digital Banking
DIGITAL BANKING +57% 1Q ‘22 vs 1Q ‘21 Digital TXNs year-on-year Bringing our signature touch in relationship banking to our customers anytime, anywhere. +50% Active Users year-on-year 68% share of digital & e- +41% banking to total TXNs Enrollments year-on-year as of Mar’22 +47% underpinned by a rap
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 Top Corporate Issue 2nd Strongest Bank in the Payment Initiative of the Top Corporate Securities Php9 Billion financing Cesar E.A. Virata Award Manager / Arranger Philippines Year Market Makers and Top (Bank Category) Investment House Philippi
Slide 26: In summary, CHIB continues to be..
In summary, CHIB continues to be.. 1Q2021 FY2021 1Q2022 Return on Equity 13.4% 13.6% 16.0% Profitable Return on Assets 1.4% 1.5% 1.7% CET 1/Tier 1 Ratio 14.5% 14.9% 15.5% Adequately-capitalized Capital Adequacy Ratio 15.4% 15.7% 16.3% NPL Ratio 3.8% 2.5% 2.5% Well-managed NPL Coverage Ratio 86% 116%
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 98% of employees fully vaccinated, 58% given booster shots Almost 100% of branches open for operations Compliant with health standards of DOH, DOLE, DTI, and IATF Working closely with clients in the most challenged sectors • 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 May 12, 2022 Investment grade credit rating of Baa2 with stable outlook from May 2017 Ticker CHIB Same level as the Philippine sovereign rating Stock Price Php27.95 and at par with the country’s three biggest banks Market Cap (in PHP M
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 Mar'22 vs Mar'22 vs Mar-21 Dec-21 Mar-22 in Php billions, except % Dec'21 Mar'21 Liquid Assets 207 188 153 -18% -26% Investment Securities 204 279 321 15% 57% Net Loans 555 609 616 1% 11% Other Assets 37 36 37 2% 0% Total Assets 1,003 1,112 1,127
Slide 35: Financial Highlights – Income Statements
Financial Highlights – Income Statements INCOME STATEMENTS 1Q22 vs 1Q22 vs 1Q2021 2Q2021 3Q2021 4Q2021 1Q2022 In Php billions, except % 4Q21 1Q21 Interest income 11.4 11.4 11.6 12.2 12.6 4% 11% Interest expense (2.0) (1.8) (1.8) (1.8) (1.9) 1% -8% Net interest income 9.3 9.6 9.9 10.3 10.8 4% 15% Fee
Slide 36: 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. Patrick D. Cheng Rosemarie C. Gan Senior Executive Vice President and Executive Vice President and Chief Executive Vice President and H
Slide 37: Thank You!
Thank You! ASC Ref No. C010P013122CS THE BEST BANK IN THE COUNTRY