The P544.1 million increase are broken down as follows:
- P272.9 million or 50.2% of the increase was due to the increase in Net Interest Income and Fees and Commissions, excluding trading income. This is 18.1% better compared to 2011 core earnings.
- Trading income from Fixed Income Securities and Foreign Exchange accounted for 49.8% of the increase in Total Revenues.
The increase in core earnings of Net Interest Income and Fees were due to the following:
- 14.4% year-on-year expansion of Assets which ended the quarter at P86.6 billion.
- While pressure on spreads continue to weigh on banks as a result of intense competition and low level of interest rates, EW registered a higher increase in Net Interest Income because its Consumer Portfolio of Credit Cards, Auto, Personal Loans, Mortgages continue to post healthy growth. In the first quarter of 2012, EW's consumer loans portfolio grew by 25.7%
- Loans to businesses only grew by 6.6% as the Bank lessened its exposure to low spread bigger corporates and concentrated its efforts to the mid-sized corporate borrowers.
- Current Accounts and Savings Accounts (CA/SA) increased by 22.2% to P30.5 billion
The Bank ended the quarter with 144 branches. This is 31 more branches from 113 in Q1 2011.
The Bank Operating costs went up by P347 million or an increase by 36.2% to P1.3 billion.
- The increase in expenses was due to the on-going expansion efforts. Manpower related cost increased by P52.2 million or 15.6% to P387 million. Technology expenses went up by P21.6 million or by 119.7%.
- The bank also ramped up its advertising expenses, which increased by P65.0 million or by 106.3%.
Provisions for doubtful assets went up by P243.7 million. The increase was due to the adjustments in 2011 which lowered the provisions to P80.0 million, even while NPL ratio improved to 4.36% from 5.76 in 2011.
As of March 31, 2012, capital adequacy ratio stood at 18.1% and tier 1 ratio was at 13.6%.
"What is important to us at this point is to build our revenue base. To do that, we will continue expanding our national footprint of branches and increase our coverage of the consumer and mid-sized corporate lending businesses and further improve customer service. While competition is getting stiffer and the global economic prospects remain uncertain, we remain guardedly positive on the local economic prospects and we will continue with our expansion plans for the year, " said EastWest Bank President and CEO Antonio C. Moncupa Jr.
About EasWest Bank
EasWest Bank opened its doors to the public on August 1, 1994. The Bank is a subsidiary of the Filinvest Development Corporation (FDC), the publicly listed holding company of the Filinvest Group that evolved from a consumer business founded by Andrew L. Gotianun, Sr. in 1995. FDC is one of the country's premier conglomerates, with business interests in real estate, banking, sugar, hospitality & tourism, and power-generation. Through the years, EasWest Bank has successfully capitalized on the financial strength and synergy from the business organizations under the Filinvest Group.
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