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EASTWEST ALLOTS P9.2 BILLION LOAN-LOSS PROVISIONS
- By The Financial District
- Mar 19, 2021
- 2 min read
Listed EastWest Bank has set aside P9.2 billion in total provisions for loan-losses, 2.4 percent higher than last year's P4 billion, the bank announced.
In disclosures to the Philippine Stock Exchange (PSE), the bank said that it posted a Net income of P6.5 billion in 2020, 4% higher than last year's P6.2 billion, with Return on Equity (ROE) at 12.3% and total assets at P408.2 billion, almost flat from 2019's P403. billion.
“The pandemic defined EastWest’s operating results in 2020. Lockdowns, social distancing, and limited mobility resulted to the economy contracting by 9.5% and appropriately prompted the monetary authorities to loosen financial conditions," EW CEO Tony Moncupa noted.
EW’s Net Revenues rose by 16% to ₱33.4 billion from the previous year. Net Interest Income was at ₱26.5 billion, 23% higher than 2019, mainly due to lower funding costs.
The Bank sustained its industry-leading margins, with Net Interest Margin (NIM) at 8.1%.
EastWest’s total Loans & Receivables were down 9% to ₱243.7 billion, mostly due to contractual maturities and lower overall demand as businesses and households held off borrowing due to the pandemic.
Deposits on the other hand increased by 8% to ₱329.1 billion, with low-cost CASA increasing by 23% to ₱228.8 billion. The CASA ratio improved to 70%, from the previous year’s 61%.
The higher income and slower growth of risk-weighted assets improved capital buffers with the Bank’s Capital Adequacy Ratio (CAR) and Common Equity Tier 1 (CET1) ratio at 13.8% and 12.6%, respectively, from 12.9% and 10.4% in the previous year.
“While the Bank has been among the top 3 most profitable universal banks in the last four years, the prospect of a five-peat is uncertain for 2021. The shifting contours of the coronavirus pandemic make it difficult to pin down a 2021 income guidance. Fortunately, the Bank with its higher capital buffers and the loan loss provisions in 2020 is in a good position to face the remaining pandemic challenges and the rebuilding that will follow the vaccines."
