China Bank: Conquering Bearish Sentiments


Steady grower overcomes market trepidations

China Bank (CHIB) recently joined Union Bank in outperforming most of its peers so far this year amid broader market decline. The seventh largest bank by assets provided 4.8% total return to its shareholders.

The bank recently reported 17% rise in net interest income and 15% increase in profits for its 2017 operations.

“2017 was a pivotal year in the transformation and development of the China Bank Group.

“We grew as projected and I am pleased that our strong fundamentals and solid organic growth gave us the platform to meet the opportunities and challenges in 2018.”

China Bank President William C. Whang

CHIB’s book value ended at an estimated 83.8 billion giving it a price-book value multiple of 1.1x vs. its industry’s 3x.

The bank had an estimated CET 1 Ratio (capital ratio) of 12.9% compared to 11.3% a year earlier.

CHIB’s non-performing loans, meanwhile, improved to 1.8% in 2017 from 1.9% in 2016.

The bank’s profitability, net interest margin, was estimated to decline to 2.9% in 2017 from 3% in 2016.

In the past three years, CHIB raised 7.8 billion in financing activities while having provided 5.2 billion in shareholder dividends.

COL Financial, a reputable Philippine brokerage firm, rated CHIB a buy with a value of 42/share compared to 34.90/share at the time of writing.

Personal estimates indicated a per share figure of 84/share.

Disclosure: No shares in CHIB and UBP.

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