China Banking Corp. · PSE:CBC
China Banking — FY2023 Earnings Presentation
34 slides from China Banking's earnings presentation, Mar 5, 2024
Slide 1: Analysts' Briefing Full Year 2023 Results
Analysts’ Briefing Full Year 2023 Results March 5, 2024 1
Slide 2: Panelists
Panelists Patrick D. Cheng Gerald O. Florentino Chief Finance Officer Investor Relations Head 2
Slide 3: 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 3
Slide 4: FY 2023 Financial Performance
FY 2023 Financial Performance 4
Slide 5: FY 2023 Financial Highlights
FY 2023 Financial Highlights P22.0 Bn 15.5% 15.3% P55.82 2023 Net Income Return on Equity CET-1 Ratio Book value per share FY2023 Net income grew 15% to P22.0 billion; Resilient NII despite pressure on funding cost; NIM improved by 7 bps QoQ Income Statement to 4.40% in 4Q’23; Provisions decli
Slide 6: FY 2023 Financial Highlights: Income Statements
FY 2023 Financial Highlights INCOME STATEMENTS YoY 2022 2023 In Php billions, except % change Interest income 57.2 79.4 39% Interest expense (11.6) (25.8) 122% Net interest income 45.6 53.5 17% Fee-based income 10.1 0.6 -94% Total revenue 55.7 54.1 -3% Operating expenses (24.4) (27.0) 11% Income bef
Slide 7: FY 2023 Financial Highlights: Balance Sheets
FY 2023 Financial Highlights BALANCE SHEETS YoY 2022 2023 in Php billions, except % change Liquid Assets 178 155 -13% Investment Securities 412 505 22% Net Loans 700 772 10% Other Assets 40 46 16% TOTAL ASSETS 1,330 1,478 11% Deposits 1,066 1,187 11% CASA 573 575 0% Time Deposits 492 611 24% Bills a
Slide 8: Sustained profitability amidst a challenging environment
Sustained profitability amidst a challenging environment Quarterly Net Income (In PHP Bn) Annual Net Income (In PHP Bn) +15% YoY 22.0 Trailing 12 months EPS 19.1 P8.18/sh +15% YoY +32% vs 4Q22 +9% vs 3Q23 5.8 5.4 5.8 4.9 5.2 5.0 4.6 4.4 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 2022 2023 8
Slide 9: Resilient NII despite pressure on funding costs
Resilient NII despite pressure on funding costs NIM stabilizes above 4% Net interest income continues to grow Q-on-Q Net Interest Income (In PHP Bn) +21% vs 4Q22 18 consecutive 6.46% 6.49% 16.0 +5% vs 3Q23 6.27% 6.32% +3 bps 6.12% vs 3Q23 14.4 5.52% 14.0 quarters of growth 13.6 5.28% (since 3Q19) 12
Slide 10: Resilient NII despite pressure on funding costs
Resilient NII despite pressure on funding costs Net interest income continues to grow Net Interest Income (In PHP Bn) +17% YoY 72 68 64 1.5 60 12.9 11.4 56 52 Gross yield Cost of funds 1.3 9.3 53.5 48 up 104 bps up 103 bps 44 YoY YoY 45.6 Loans and 40 investment 36 securities grew 32 10% and 22%, re
Slide 11: Core fee-based income remains strong
Core fee-based income remains strong Fee-based Income (In PHP Bn) 12 0.5 0.1 0.4 +19% YoY 10.1 +15% YoY +24% YoY The decline in Treasury and FX- 8 related gains was offset by 6.6 higher accrual income on Investment securities Core fee income continues to grow on higher deposits, Trust and transactio
Slide 12: Operating expenses impacted by persistently high inflation during the period
Operating expenses impacted by persistently high inflation during the period Operating Expenses ex provisions (in PHP Bn) +11% YoY 28 0.3 0.2 0.5 27.0 0.9 +15% YoY +3% YoY 0.8 +20% YoY 24 +19% YoY Heavy 24.4 +10% YoY Higher deposit investments on Higher volume- balances digital Higher related taxes
Slide 13: Stable asset quality and sufficient NPL cover
Stable asset quality and sufficient NPL cover Stable asset quality results to lower provisions NPL ratio has stabilized; NPL cover remains adequate Provisions (In PHP Bn) 13.0% 140% 129% 128% 123% 116% 11.0% 120% 8.9 8.9 9.0 104% 9.0% 108% 100% 104% 94% 95% 7.0% 89% 80% 5.0% 60% 2.6 -86% YoY 4.1% 3.
Slide 14: Sustained loan growth
Sustained loan growth Continued expansion in both consumer and business segments Well-secured consumer lending portfolio Gross Loans (In PHP Bn) Consumer Loans Breakdown, December 2023 +10% YoY Auto 791 718 181 +25% YoY Housing 13% 624 P181 578 144 572 106 114 122 56% Bn +6% YoY 573 610 Unsecured 47
Slide 15: Strong Deposit growth
Strong Deposit growth CASA declined but still above pre-pandemic level Deposits per branch (In PHP Bn) Deposits (In PHP Bn) +11% YoY 1,187 1.83 1,066 1.67 863 835 611 1.35 775 492 1.32 0.94 +24% YoY 1.23 0.77 308 366 0.48 364 0.58 0.58 Pre-pandemic CASA level 555 573 575 0.90 0.89 0.87 469 0.74 412
Slide 16: Strong internal capital generation results to higher buffer
Strong internal capital generation results to higher buffer 20% Enough capital buffer: to absorb credit shock; 18% to support AssetCapital growth;Ratios and 0.6% to sustain dividend payment to shareholders 2.8% 1.3% 16% 15.9% 16.1% 0.7% 15.8% 14.7% 0.8% 0.9% 0.9% 15.3% 15.1% 13.7% 0.9% 14% 0.9
Slide 17: Increasing dividend payments to Shareholders
Increasing dividend payments to Shareholders 10.0 40% 36% 34% 33% 35% 31% 31% 31% 8.0 30% 29% 29% 28% 30% 27% 27% 27% 26% 6.2 25% 6.0 22% 5.6 4.5 20% 5.1 4.1 4.0 3.4 15% 3.2 3.1 4.0 3.0 2.9 2.8 2.7 2.4 2.5 2.2 2.1 10% 2.7 2.7 2.0 2.2 2.4 1.9 2.0 1.6 1.6 1.7 5% 1.3 1.4 1.1 1.2 - 0% 2009 2010 2011 201
Slide 18: Net Income and ROE significantly improved over the last 5 years
Net Income and ROE significantly improved over the last 5 years Became the 4th Reached P1 trillion largest private bank in Assets and P100 in PH in terms of Incorporated China billion in Equity Assets Acquired Bank Capital Pampanga-based Acquired Plantersbank Raised P15 billion Unity Bank Entered cr
Slide 19: Focus on optimizing branches in the last 5 years
Focus on optimizing branches in the last 5 years Became the 4th Reached P1 trillion largest private bank in Assets and P100 in PH in terms of Incorporated China billion in Equity Assets Acquired Bank Capital Pampanga-based Acquired Plantersbank Raised P15 billion Unity Bank Entered credit card from
Slide 20: In summary, Chinabank continues to be..
In summary, Chinabank continues to be.. FY2021 FY2022 FY2023 Return on Equity 13.6% 15.1% 15.5% Profitable Return on Assets 1.5% 1.6% 1.6% CET 1/Tier 1 Ratio 14.9% 15.1% 15.3% Adequately-capitalized Capital Adequacy Ratio 15.8% 15.9% 16.1% NPL Ratio 2.5% 2.3% 2.5% Well-managed NPL Coverage Ratio 116
Slide 21: Q & A
Q&A Please click the “Raise Hand” button to be recognized. You may also send questions thru the chat box. 21
Slide 22: Additional Information
CHINABANK Additional Information
Slide 23: History of Chinabank
History of Chinabank Pre-2000s 2007 - 2015 2016 - 2019 2020 - 2022 2007. Acquired Manila Bank and 2020. Raised P15 Bn via fixed- operated it as China Bank rate retail bonds; Celebrated Savings; 100 years and restored Binondo Business Center Entered into a bancassurance JV 2021. Raised P20 Bn via fix
Slide 24: Company Profile
Company Profile Extensive Distribution Channels* Subsidiaries & Affiliates 648 1,070 10,662 Investment Grade Credit Rating Best in Corporate Governance Baa2 PRS Aaa (corp.) Stable Chinabank was recognized by the ASEAN Capital Stable Markets Forum as among the ASEAN Asset Class, ASEAN Top 20, and Top
Slide 25: SM Group: Strong Support & Synergies
SM Group: Strong Support & Synergies Chinabank benefits from being part of one of the largest and most diversified conglomerates in the Philippines Snapshot of SM Group Business Lines Chinabank’s Current Shareholdings Others SM Group 34% 39% SM Investments – 23% Retail Banking Property Sysmart Corp.
Slide 26: Digital Banking
Digital +19% Banking Digital TXNs year-on-year 2023 vs 2022 Bringing our signature touch in relationship +28% banking to our customers O/S Active Users anytime, anywhere. year-on-year +27% O/S Enrollments ≈71% year-on-year share of digital & e- banking to total TXNs FY2023 +26% Gross TXN Value year-
Slide 27: Awards & Distinctions
Awards & Distinctions Chinabank was recognized by the ASEAN Capital Markets Forum as among the ASEAN Asset Class, ASEAN Top 20, and Top 3 Philippine Publicly Listed Companies Chinabank is the best governed bank for 2 years in a row and still the only bank awarded with the Five People Management Asso
Slide 28: Other Citations
Other Citations Chinabank Easy Tax Mobile Banking & Apo Agua Infrastructure 2nd Strongest Bank in the Payment Initiative of the Top Corporate Securities Php9 Billion financing Cesar E.A. Virata Award Best Digital Business Philippines Year Market Makers and Top (Bank Category) Banking Initiative Phil
Slide 29: Highly capable management team
Highly capable management team Hans T. Sy Gilbert U. Dee Romeo D. Uyan, Jr. Chairman of the Board Vice Chairman of the Board President and Chief Executive Officer Chairman since 2011 Vice Chairman since 2011 With CHIB since 2014 Member of the Board since 1986 Member of the Board since 1969
Slide 30: Market Data
Market Data TRADING INFORMATION TRADING INFORMATION MARKET VALUATION Ticker (Bloomberg I Reuters) CHIB PM I CHIB.PS 2021 2022 2023 Par value (PHP) 10.00 Book value per share 44.2 50.0 55.8 Outstanding shares 2,691,340,312 Earnings per share 5.6 7.1 8.2 Stock price as of Mar 4, 2024 34.75 Price to bo
Slide 31: Historical Financial Highlights
Historical Financial Highlights BALANCE SHEETS Dec23 vs Dec 2019 Dec 2020 Dec 2021 Dec 2022 Dec 2023 in Php billions, except % Dec22 Liquid Assets 144 205 188 178 155 -13% Investment Securities 213 236 279 412 505 22% Net Loans 569 557 609 700 772 10% Other Assets 37 38 36 40 46 16% TOTAL ASSETS 962
Slide 32: Historical Financial Highlights
Historical Financial Highlights INCOME STATEMENTS FY23 vs FY2019 FY2020 FY2021 FY2022 FY2023 In Php billions, except % FY22 Interest income 47.7 47.7 46.5 57.2 79.4 39% Interest expense (21.6) (13.3) (7.4) (11.6) (25.8) 122% Net interest income 26.1 34.4 39.1 45.6 53.5 17% Fee-based income 8.4 9.5 9
Slide 33: Legal Disclaimer
Legal Disclaimer This presentation and the information contained herein as well as the materials distributed herewith ("Presentation") are the sole and exclusive property of China Banking Corporation (“Chinabank”) and shall only be used for the purpose intended herein. None of the information contai
Slide 34: Thank You!
CHINABANK Thank You!