EastWest Bank grew its profit by 75% to P2.3 billion in January to March despite higher provisioning for loan losses.
The strong growth was attributed to better margins from core lending and deposit-taint business as well as higher trading gains.
Loan loss provisions more than doubled to P2.4 billion as the coronavirus pandemic weighed heavily on economic activity.
“The lockdown, the only viable response to stem the spread of the virus until a vaccine is found, has shuttered the economy and is expected to make it difficult for some businesses and consumers to service loans,” EastWest Bank said.
Net revenues expanded by 45% to ₱9.6 billion. Net Interest Income, which accounted for 69% of revenues, surged 42% while non-interest income climbed 52% or ₱1 billion, largely due to securities trading gains.
Following a record year in 2019, Eastwest Bank is now bracing for lower earnings this year as it anticipates a wave of loan defaults.
“We were looking forward to another record year, at least ₱8 billion in income for 2020 – until COVID-19 struck. Now, we have to be ready that profits could be lower this year, said Tony Moncupa, CEO of EastWest.
“This pandemic is unprecedented and is still playing out. With no historical guide to anchor on, it is difficult to estimate bad debts. A lot now depends on government policy interventions.
Consumers and businesses, especially MSMEs, need assistance. Fortunately, the country has healthy fundamentals and programs to assist households and businesses to contain the damage are on the table. These unfolding programs and the swift, proactive and decisive policy adjustments of the BSP give us hope that the damage could be managed, and the recovery will be fast. But let’s see how it goes.”, Moncupa said.