China Banking Corp. · PSE:CBC
China Banking — 9M 2024 Earnings Presentation
36 slides from China Banking's earnings presentation, Nov 7, 2024
Slide 1: Analysts' Briefing 9M 2024 Results
Analysts’ Briefing 9M 2024 Results November 7, 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: 9M 2024 Financial Performance
9M 2024 Financial Performance 4
Slide 5: 9M 2024 Financial Highlights
9M 2024 Financial Highlights P18.4 Bn 15.7% 14.8% P60.43 9M 2024 Net Income Return on Equity CET-1 Ratio Book value per share 9M 2024 Net income grew 13% to P18.4 billion; Income Statement Resilient NII despite pressure on funding cost; NIM improved by 18 bps YoY to 4.4% in 9M 2024; Gross Loan
Slide 6: 9M 2024 Financial Highlights: Income Statement
9M 2024 Financial Highlights INCOME STATEMENTS YoY 9M 2023 9M 2024 In Php billions, except % change Interest income 58.2 68.7 18% Interest expense (19.0) (22.3) 17% Net interest income 39.2 46.5 19% Fee-based income 1.4 (0.1) n.m. Total revenue 40.5 46.3 14% Operating expenses (20.2) (22.0) 9% Incom
Slide 7: 9M 2024 Financial Highlights: Balance Sheets
9M 2024 Financial Highlights BALANCE SHEETS YoY Sep 2023 Sep 2024 in Php billions, except % change Liquid Assets 136 129 (5%) Investment Securities 485 562 16% Net Loans 746 852 14% Other Assets 43 52 20% TOTAL ASSETS 1,411 1,595 13% Deposits 1,145 1,298 13% CASA 563 567 1% Time Deposits 582 731 26%
Slide 8: Sustained profitability amidst a challenging environment
Sustained profitability amidst a challenging environment Quarterly Net Income (In PHP Bn) YTD Net Income (In PHP Bn) +13% 18.4 16.2 14.7 Breached the P6-billion net income mark in 3Q’24 +29% +25% 6.9 5.8 5.8 5.9 5.5 5.2 5.0 5.4 4.9 4.6 4.4 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 9M22
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) +18% vs 3Q23 +4% vs 2Q24 18.0 21 consecutive 16.0 quarters of growth 6.57% 6.69% +12 bps 6.46% 6.50% 6.47% 15.4 6.32% 16.0 15.0 6.12% vs 2Q24 (since 3Q
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) +19% YoY 56 52 2.3 1.0 48 2.9 Total Deposits 44 Gross yield up 13% YoY 46.5 7.6 up 23 bps Cost of funds 40 up 11 bps YoY YoY 36 39.2 Loans and investment 32 securities grew 14% and 1
Slide 11: Core fee-based income remains strong
Core fee-based income remains strong Fee-based Income, ex trading and FX losses (In PHP Mn) 10,000 +81% 9,167 9,000 8,000 Miscellaneous +5.1X YoY 7,000 4,846 Core fee income continues to grow on higher Gain on investment properties deposits, Trust and transaction-based income 6,000 -7% YoY 5,060 5
Slide 12: Demonstrated prudent cost management
Demonstrated prudent cost management Operating Expenses ex provisions (in PHP Bn) +9% 22.0 20.2 +3% YoY Others 6.0 5.8 1.7 +17% YoY Depreciation Volume-related taxes higher due to bigger 1.5 deposit balances and higher gross revenues 7.3 +7% YoY Manpower 6.8 Core Opex (excluding Business Taxes a
Slide 13: Improving asset quality and sufficient NPL cover
Improving asset quality and sufficient NPL cover Improved asset quality results to conservative provisions NPL ratio has improved; NPL cover more than adequate Provisions (In PHP Bn) 13.0% 160% 141% 129% 140% 11.0% 128% 8.9 8.9 9.0 123% 116% 120% 9.0% 104% 108% 100% 7.0% 103% 94% 95% 95% 89% 80% 5.0
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, September 2024 +14% YoY 872 Auto 791 765 718 207 Housing 12% 624 181 170 +21% YoY P207 572 144 123 55% Bn 114 Unsecured 665 +12%
Slide 15: Managed Deposit growth
Managed Deposit growth CASA inched up and still above pre-pandemic level Deposits per branch (In PHP Bn) Deposits (In PHP Bn) +13% YoY 2.00 1,298 1.83 1.78 1,187 1.67 1,145 1,066 1.32 1.35 1.13 863 731 +26% YoY 0.94 0.91 835 0.77 611 582 492 0.48 308 0.58 366 Pre-pandemic CASA level 573 575 0.87 0.9
Slide 16: Strong internal capital generation results to higher buffer
Strong internal capital generation results to higher buffer Enough capital buffer: to absorb credit shock; 18% to support Asset Capital growth; Ratios and 0.7% 2.1% to sustain dividend payment to shareholders 16% 1.6% 15.8% 15.9% 16.1% 0.2% 15.7% 14.7% 0.9% 0.9% 15.3% 0.8% 0.9% 14% 14.8% 0.9%
Slide 17: Increasing dividend payments to Shareholders
Increasing dividend payments to Shareholders 8.00 30% 29% 27% 27% 27% 27% 7.00 25% 5.9 6.00 22% +16% 27% 5.1 2024 Dividend Payout 20% 5.00 4.0 4.00 15% 3.00 2.4 2.7 2.7 2.20 10% 6.0%* 3.9%** 1.90 2.00 1.50 0.88 1.00 1.00 5% Dividend Yield 1.00 *Based on April 17, 2024 closing price (declaration date
Slide 18: We are executing our strategies
We are executing our strategies Expanded business relationships (clients to access both sides of the balance sheets) Increased contributions from auxiliary businesses (FX, Trust and Capital markets) Increased digital investments (around 7% of OPEX) Strengthened Management Team with internal
Slide 19: Policy Rate and RRR cuts will improve NIM
2% 4% 6% 8% Mar-22 Apr-22 May-22 Jun-22 Jul-22 Aug-22 Sep-22 Oct-22 Nov-22 Dec-22 Jan-23 Feb-23 Mar-23 Apr-23 May-23 Jun-23 Jul-23 Aug-23 Sep-23 Oct-23 Nov-23 Dec-23 Jan-24 BSP Policy Rate Feb-24 Mar-24 Apr-24 May-24 Jun-24 Jul-24 Aug-24 Sep-24 6.00% Oct-24 Nov-24 Dec-24 Dec 2024 meeting cut by the
Slide 20: In summary, Chinabank continues to be..
In summary, Chinabank continues to be.. FY2022 FY2023 9M'23 9M'24 Return on Equity 15.1% 15.5% 15.6% 15.7% Profitable Return on Assets 1.6% 1.6% 1.6% 1.6% CET 1/Tier 1 Ratio 15.1% 15.3% 14.9% 14.8% Adequately-capitalized 510.0% 510.0% Capital Adequacy Ratio 15.9% 16.1% 15.8% 15.7% 32.25806 3252.6% N
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
[E} Chinabank Additional Information
Slide 23: History of Chinabank
History of Chinabank Pre-2000s 2007 - 2015 2016 - 2019 2020 - 2024 2020. Raised P15 Bn via fixed- 2007. Acquired Manila Bank and rate retail bonds; Celebrated operated it as China Bank 100 years and restored Binondo Savings; Business Center 2021. Raised P20 Bn via fixed- Entered into a bancassurance
Slide 24: Company Profile
Company Profile Extensive Distribution Channels* Subsidiaries & Affiliates 648 1,082 11,140 Investment Grade Credit Rating Best in Corporate Governance Five Golden-Arrow Recognition, the highest corporate governance Baa2 award given by the Institute Stable of Corporate Directors (ICD). *As of Septem
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 +30% Banking Digital TXNs year-on-year 9M 2024 vs 9M 2023 Bringing our signature touch in relationship banking to our +20% customers anytime, O/S Active Users anywhere. year-on-year +23% O/S Enrollments ≈73% year-on-year share of digital & e- +30% banking to total TXNs 9M 2024 Digital Gross
Slide 27: Awards & Distinctions
Awards & Distinctions People Management Association of the Philippines 2023 EMPLOYER OF THE YEAR 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 27
Slide 28: Other Citations
Other Citations Best Credit Card for Best Home Loan Travelers in the Financing in the Suntrust P25 Bn Repower Energy Best Managed Fund Philippines, Philippines Project Finance Development for Bond Long-Term Cesar E.A. Virata Facility Corporation IPO Dollar Category Award Chinabank Chinabank HomePlus
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 CBC 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) CBC PM I CBC.PS Dec-22 Dec-23 Sep-24 Par value (PHP) 10.00 Book value per share 50.0 55.8 60.4 Outstanding shares 2,691,340,312 Earnings per share 7.1 8.2 9.0 Stock price as of November 5, 2024 57.00 Pr
Slide 31: Profitability significantly improved over the last 5 years
Profitability 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 Raised P15 billion Unity Bank Entered credit card from sto
Slide 32: 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 Raised P15 billion Unity Bank Entered credit card from stock rights
Slide 33: Historical Financial Highlights
Historical Financial Highlights BALANCE SHEETS Sep 24 vs Sep 24 vs Dec 2019 Dec 2020 Dec 2021 Dec 2022 Dec 2023 Sep 2023 Sep 2024 in Php billions, except % Sep 23 Dec 23 Liquid Assets 144 205 188 178 155 136 129 (5%) (17%) Investment Securities 213 236 279 412 505 485 562 16% 11% Net Loans 569 557 6
Slide 34: Historical Financial Highlights
Historical Financial Highlights INCOME STATEMENTS 9M24 vs FY2019 FY2020 FY2021 FY2022 FY2023 9M2023 9M2024 In Php billions, except % 9M23 Interest income 47.7 47.7 46.5 57.2 79.4 58.2 68.7 18% Interest expense (21.6) (13.3) (7.4) (11.6) (25.8) (19.0) (22.3) 17% Net interest income 26.1 34.4 39.1 45.
Slide 35: 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 36: Thank You!
[E} Chinabank Thank You! Focused on You