Gotianun-led EastWest Bank (EW) reported a PhP2.5 billion net income for the first six months of the year, up 60% over the same period in 2016, sustaining the 70% and 54% growth in 2016 and Q1 2017, respectively. Total assets, on the other hand, grew 20% to PhP310 billion driven by the growth in the bank's loan portfolio.

Total loans increased 19% to Php212 billion, led by the 34% growth in consumer loans. Consumer loans account for 71% of the bank's total loans. The consumer-focused universal bank maintained its industry leading net interest margin of 7.8%. The bank also reported that its net interest margin net of provisions for loan losses, a metric that makes comparison among banks more meaningful, was at 6.1%. Net interest margin net of provisions for loan losses of listed universal and commercial banks was at 3.3% in 2016. Meanwhile, deposits stood at PhP255 billion, 24% higher versus the same period in 2016.

"The bank's operating leverage continues to improve as we complete our store expansion program. Our businesses, particularly consumer loans and deposits, continue to post robust growth. On the other hand, credit costs tapered off as asset expansion was more on secured and lower credit cost sectors," said EW President & Deputy CEO Bobby Reyes.

Improving Productivity 
Net revenues increased by 16% to PhP12.1 billion year-on-year even as net revenues before trading income was 25% better. EastWest reported that its total trading revenues declined by 71% from PhP918 million in the first half of 2016. Operating expenses, on the other hand, increased by 14% to PhP6.5 billion.

"Our first half trading revenues was not as good as we hoped. We are happy though that our core recurring income has more than made up for the lower trading revenues. Our core revenues are improving at double the pace of the increase in operating expenses," Reyes added.

Income Guidance 
The bank reported that its return on equity improved to 14.1% from 9.8% in 2016. Its return on assets, on the other hand, was at 1.7% compared to the 1.3% booked last year. EW Vice Chairman and CEO Tony Moncupa, when asked for income guidance, previously said that "... we will be sad if our 2017 income is less than PhP4.25 billion, or 25% better versus the PhP3.4 billion we booked in 2016..."

"It now appears that we will not be sad. Income growth will likely be higher than 25%. Based on the first half 2017 results and the trajectory of our businesses, we have a chance to end 2017 with above industry average return on equity. We are now looking at 2017 full year income of at least PhP4.8 billion," Moncupa said.