EastWest’s (EW) net income for the first half of 2019 went up by 21% to ₱2.7 billion mainly due to higher fees and commissions, higher trading gains, and lower credit costs. The Bank reported a Return on Equity (ROE) of 12.3%. Total assets grew by 22% to ₱389.5 billion.

Revenues rose by 8% to ₱13.2 billion from ₱12.2 billion in the same period last year. This was primarily driven by fees and commissions growing by 30% to ₱2.7 billion as well as securities and foreign exchange trading gains ending at ₱629.5 million compared to last year’s ₱218.5 million.

“Last quarter [1Q2019], we mentioned that due to tight liquidity and higher funding costs, our margins were ‘squeezed’. We are slowly seeing improvement on this and anticipate a better second half for 2019”. EW President and Deputy CEO Bobby S. Reyes said. EW’s Net Interest Margin (NIM) is at 6.5%, better from the previous quarter of 6.4% and the industry’s 3.6%. “EW’s above industry NIM is due to its unique consumer loan mix comprising 72% of its total loan portfolio, the opposite of most big banks” Bobby further explained.

Operating expenses excluding provisions for losses meanwhile increased by 9% to ₱7.9 billion, mainly due to business related expenses and intensified marketing acquisition campaigns to generate more loans and retail deposits. Provisions for losses went down by 12% from the previous year to ₱1.7 billion. Despite the decline, the Bank’s loan portfolio is adequately provisioned under its expected credit loss models.

Capital ratios remain healthy and within regulatory standards, with Capital Adequacy Ratio (CAR) and CET1 ratios at 13.0% and 10.3%, respectively. Capital ratios improved from previous quarter of 12.6% and 9.9%, respectively, due to one-offs which included the adoption of PFRS 16 Lease accounting as well as an additional infusion to our bancassurance joint venture, Troo.

“For the second half of 2019, we anticipate our net interest margins to recover as the liquidity situation improves and interest rates to normalize” Bobby concluded.