Slide 1: Investors Presentation Financial Performance 1H 2020
CHINA BANKING CORPORATION Investors Presentation Financial Performance 1H 2020
Slide 2: Our Response to COVID-19 Outbreak
Our Response to COVID-19 Outbreak Almost 100% of branches open for operations Extended waiver of fees on InstaPay & PesoNet and provided digital options to retail and business clients Conducted rapid testing for employees & agency personnel Continued to provide transportation services for em
Slide 3: China Bank Profile: Who we are
China Bank Profile Who we are Company Identifiers (Bloomberg/Reuters) CHIB.PM/CHIB.PS Long history as one of the oldest privately owned banks, established in 1920 Stock Price as of June 30, 2020 21.00 Publicly-listed since 1927 on the Manila Stock Exchange Strong presence in the entrepreneur,
Slide 4: China Bank Profile: Where we are
China Bank Profile Where we are ASSETS NET LOANS DEPOSITS EQUITY 982 Bn 580 Bn 7 7 3 Bn 98 Bn #5 #5 #5 #7 Ranking among privately-owned domestic banks as of June 30, 2020 3
Slide 5: China Bank Profile: Major Milestones
China Bank Profile Major Milestones Acquired Manila Bank with 75 branch licenses and renamed to China Bank Investment Banking Savings Subsidiary Spin-off Celebrates 100 years, Infused additional restores Binondo Incorporated PHP500M capital Business Center Acquired to CBS 1920 1927 2007 2012 2013 20
Slide 6: China Bank Profile: Full Service Platform
China Bank Profile Full Service Platform 1 2 3 Savings Bank & Relationship Banking Financial Markets Bancassurance Lending Business Segment Treasury Retail Banking China Bank Savings Business Segment - SME - Consumer - Deposits Institutional Banking - Housing/Auto Wealth Management - Teachers’ Loan
Slide 7: Key Investment Highlights
Key Investment Highlights 1 Strong Brand Franchise and Solid Track Record 2 Compelling Growth Story 3 Strong Support from Shareholders and Synergies with the SM Group 4 Experienced and Competent Management Team 5 Best Practice in Governance 6
Slide 8: Strong Brand Franchise and Solid Track Record
1 Strong Brand Franchise and Solid Track Record Loyal and highly valuable customer base Strong presence in entrepreneur segments Multi-generational relationships Sustainable and profitable Agile and entrepreneurial mindset niche client relationships Network Expansion since 2007 Very Good Credit Rati
Slide 9: Compelling Growth Story: Solid Balance Sheet
2 Compelling Growth Story Solid Balance Sheet with Sustainable Growth Supported by Diversified Funding Base Total Assets (PHP in Bn) Funding Profile as of Jun-2020 Other Liabs 1,200 3% +8% 962 982 Retail Bond 1,000 Capital 3% 908 10% 866 800 751 CASA 34% 633 FDCU Deposits 600 527 13% 400 Bills Payab
Slide 10: Strong Retail Base Improving Deposits per Branch
2 Compelling Growth Story Strong Retail Base Improving Deposits per Branch Deposits (PHP in Bn) Deposits per branch (PHP in Bn) 1,000 +3% 1.4 900 1.23 1.21 1.22 775 773 1.2 1.16 800 750 722 1.07 0.2 0.2 0.2 700 126 128 1.00 0.2 635 121 1.0 122 0.2 600 0.85 0.2 542 109 0.8 0.1 0.5 500 83 0.5 0.5 439
Slide 11: Measured Loan Growth Well-secured Consumer Lending Portfolio
2 Compelling Growth Story Measured Loan Growth Well-secured Consumer Lending Portfolio Gross Loans (PHP in Bn) Consumer Loans Breakdown as of Jun-2020 2015-2019 CAGR 700 +11% 22% 15% 593 Personal 600 578 loans 533 12% 513 108 +14% 107 500 YoY 456 95 87 394 74 400 Auto 20% 60 317 300 48 471 484 438 +
Slide 12: Sustained Profitability Enable Dividend Payout and Yield
2 Compelling Growth Story Sustained Profitability Enable us to increase Dividend Payout and Yield Net Income (PHP in Bn) 12 6.0 10 5.0 4.9 8 4.0 +25% 3.4 6 3.0 10.1 2.7 2.6 2.5 2.3 4 8.1 7.5 2.0 6.5 5.6 5.2 2.7 4.2 2.2 2.4 2 1.0 2.0 1.7 1.9 0 - 2015 2016 2017 2018 2019 1H19 1H20 2015 2016 2017 2018
Slide 13: Sustainable Revenue Growth Well-diversified Revenue Stream
2 Compelling Growth Story Sustainable Revenue Growth Well-diversified Revenue Stream Total Operating Income (PHP in Bn) Operating Income Breakdown as of Jun-2020 25.0 +40% Others 12% 21.0 20.0 4.7 40% Lending 15.0 business 15.0 20% 3.4 10.0 16.2 41% Retail banking 11.6 45% 5.0 Financial markets - 23
Slide 14: Opportunity to Reduce Costs And Further Drive Efficiency
2 Compelling Growth Story Opportunity to Reduce Costs And Further Drive Efficiency Operating Expenses ex provisions (PHP in Mn) Cost-to-income (%) 15,000 70 +5% 65 10,403 64 63 64 9,893 63 63 10,000 62 62 62 62 61 +1% 60 60 4,160 59 4,101 56 845 55 878 -4% 5,000 1,587 2,104 +33% 50 50 -1% 3,327 3,29
Slide 15: Margins to Improve as Interest Rates and RRR Go Down
2 Compelling Growth Story Margins to Improve as Interest Rates and RRR Go Down Q-on-Q Performance Showing Recovery Cumulative (In Percentage) Quarter-on-Quarter (In Percentage) 7.0 7.0 6.4 6.4 6.3 6.2 6.2 6.2 6.2 6.1 5.9 5.9 5.9 5.7 6.0 5.5 6.0 5.6 5.6 5.3 5.3 5.1 5.0 5.0 5.0 5.0 4.0 3.8 4.0 3.9 3.8
Slide 16: Ramped up Provisions on COVID-19 Impact; Asset Quality Healthy
2 Compelling Growth Story Ramped up Provisions on COVID-19 Impact While Asset Quality Remains Healthy Provisions (PHP in Mn) (In Percentage) 14x higher YoY, 180.0 2.5 2.6 almost 2x higher FY2019 167 160.0 2.4 4,758 146 140.0 2.2 126 120.0 2.0 1.9 109 100.0 99 91 1.8 87 1.7 2,570 80.0 1.6 1.6 1.5 60.
Slide 17: Strong Support from Shareholders and Synergies with the SM Group
Strong Support from Shareholders and Synergies 3 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 Investment 23% 27% SM Group Sysmart Corp 15% 38% Reta
Slide 18: Highly Regarded Management Team with Average of More than 30 Years of Experience
Highly Regarded Management Team with Average of 4 More than 30 Years of Experience 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
Slide 19: Best Practice in Governance
5 Best Practice in Governance Track record of excellence in Corporate Governance Golden Arrow Recognition Ceremony 2019 4-arrow recognition with score range of 110-119 in ACGS BSP Stakeholder Award – Bangko Sentral ng Pilipinas Best Corporate Governance Disclosure and Transparency Award 2nd ASEAN
Slide 20: Strategic plan in place to deliver on our targets
Strategic plan in place to deliver on our targets Underpinned by Four (4) Priority Areas • Grow fund base Growth of revenues and • Launch new deposit products and services suited to the needs of the retail and other emerging sectors size of business • Recalibrate branch functions to accommodate more
Slide 21: Thank you
Thank you 21
Slide 22: Governance – Adapting ESG Framework
Governance – Adapting ESG Framework
Slide 23: Distributing Meaningful Equity to Ordinary Employees
Distributing Meaningful Equity to Ordinary Employees Centennial Stock Grant Plan – Key Terms and Conditions* Grantee Eligibility All regular employees of the CBC group as of 16 August 2020, and certain recently retired employees Requirements retained as consultants (as specified by the Chairman of
Slide 24: No. 1 in Domestic Debt Capital Market
No. 1 in Domestic Debt Capital Market 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 Be
Slide 25: Financial Highlights – Balance Sheet
Financial Highlights – Balance Sheet Balance Sheet In Php Millions Jun-20 Jun-19 Growth (%) Liquid Assets 150,238 135,515 11 Investments 213,151 212,401 0 Loans-net 580,369 525,591 10 Other assets 38,526 34,714 11 Total Assets 982,285 908,221 8 Deposit Liabilities 772,674 750,137 3 Bills Payable 48,
Slide 26: Financial Highlights – Income Statements
Financial Highlights – Income Statements Income Statement In Php Millions 1H20 1H19 Growth (%) Net Interest Income 16,231 11,608 40 Non-interest Income 4,749 3,364 41 Total Operating Income 20,980 14,972 40 Operating Expenses ex provisions 10,403 9,893 5 Provisions 4,758 338 14.1x Total Expenses 15,