Gotianun-led EastWest (EW) doubled its earnings to P3.3 billion or 117% higher, for the first half, driven primarily by sustained momentum from its lending portfolio. Return on Equity improved to 10.6%.
Net revenues were 29% higher at P16.3 billion from the improvement in net interest income (NII) of 18% to P13.0 billion as the Bank’s consumer lending expansion pushed its core earning capacity back to pre-pandemic levels. The Bank’s consumer lending portfolio which accounts for 77% of total loans, grew by 27% led by credit cards, auto and key salary loan segments. Meanwhile, interest expense grew by P1.9 billion as the current interest rate environment translated to higher funding costs. Nonetheless, with the Bank’s asset structure, net interest margin (NIM) ended at 7.5%, improving by 77 basis points (bps) from last year, the highest in the industry.
Accompanying this solid performance were higher non-interest income which doubled to P3.3 billion. Fees and commissions surged by 70% to P2.3 billion as banking transactions improved while securities and foreign exchange trading also contributed to revenue growth this year, posting a P403 million income.
“Our ramping-up initiatives on our consumer lending portfolio that started last year are now showing results. While we have surpassed our pre-pandemic peak loan levels this quarter, the work is not complete as we focus on optimizing our balance sheet structure to unlock more value.” EastWest President, Jackie S. Fernandez, said.
Meanwhile, operating expenses stood at P9.5 billion, growing by 16%, driven largely by manpower, IT and business-related expenses. The Bank continues to spend on people-focused programs as it prepares for its growth initiatives. The Bank’s significant increase in IT-related spends are also meant to improve digital services to both its customers and employees.
Total assets ended at P434 billion, growing by 4.6% from the same period last year, while total loans and receivables grew by 22% or P49.8 billion to P273.6 billion as the Bank deployed its excess liquidity towards higher-yielding consumer loans. Meanwhile, total deposits was flat at P335.1 billion, but CASA deposits grew by 6.9% to P272.4 billion, beating industry growth trends. CASA ratio improved to 80%.
Capital ratios continue to stand at a healthy 14.0% and 13.2% for Capital Adequacy Ratio (CAR) and Common Equity Tier 1 (CET1) ratio, respectively, well above the regulatory requirements.
“Our first half results speak a lot about the hard work and dedication of the team on all fronts. This hard work was recognized by the International Finance Magazine with the Best Priority Banking Experience award – a testament to the Bank’s dedication to delivering high-quality bespoke banking services to our valued clients.
And while we exceeded our pre-pandemic loan levels this quarter, we further managed to improve our funding mix which is key to maintaining our industry-leading margins. We are also progressing steadily on our people and IT initiatives that will bring us to our next chapter of growth. We still have ways to go as far as profitability is concerned but our bigger and stronger asset base will get us there.” EastWest Chief Executive Officer, Jerry G. Ngo.
EastWest also recently launched EastWest Pay – the first in-store mobile payment application in the Philippines; and is powered by EastWest Visa credit card. This innovation uses a tap-to-pay feature via NFC capable android phones, allowing the Bank’s customers to transact safely. “We are proud to bring EastWest Pay to our customers as we continuously improve our products and services, to serve them better. This is just a first of many initiatives as we live up to what we truly stand for “Your dream our focus”. Ngo, concluded.