EastWest Bank execs report rosy performance in 2011
Business Mirror
Written by Jun Vallecera

A 50-percent drop in trading gains helped push EastWest Bank's net income 3.6 percent lower in 2011 to only P1.735 billion, its president and chief executive officer, Antonio C. Moncupa Jr., said on Wednesday.

At a briefing he hosted on Wednesday, Moncupa said this was based on unaudited numbers and compared with the bank's year-ago net income of P1.8 billion.

"Last year the bank made great strides in its core businesses which exhibited healthy growth. Unaudited figures as of December 2011 show that bank deposits grew by 16.9 percent year-on-year while corporate loans moved up 11.2 percent on the same period. The bank also saw a 24.9-percent increase in consumer loans as of the last quarter of 2011," he told reporters.

Return on equity, which measures earnings from reinvested profits, stood at 16.9 percent, which was lower than the year-ago figure of 19 percent.

Nevertheless, the performance helped make EastWest Bank one of the top performers during the year.

Capital-adequacy ratio stood at 15.21 percent, well above the regulatory 10 percent set by the Bangko Sentral ng Pilipinas (BSP).

"We generated income the old fashioned way or by way of loans and deposits from loyal customers," Moncupa said.

On forecast growth, Moncupa bared having recently paid P1.5 billion to the BSP to secure the establishment of 75 new bank branches down the line.

The BSP has deliberately made new bank licenses very expensive to obtain under a moratorium that has stood for more than a decade already.

Some banks would rather spend all that money to finance heightened loan activities but Moncupa said the money, which already financed the opening of a few additional branches last year, was well spent.

"We are securing the infrastructure for continued growth down the line. We need economies of scale and we need to get the right people to compete effectively," he said.

The bank opened nine new branches last year and this helped bring its branch network to 122 in all.

EastWest Bank evenly spreads its loan portfolio between its corporate clients and the consumer sector.

EastWest Bank Chairman Jonathan Gotianun also told reporters that now was the best time to borrow as interest rates are at record low levels, the BSP having recently reduced its policy rates by another 25 basis points.

"The Philippines is doing well. Whether you are paying fixed or floating interest on your loan, now is a good time to borrow from the banks," Gotianun said.