EAST WEST Banking Corp. (EastWest Bank) is bullish on sustained double-digit profit growth this year, barring any external shocks amid the uncertain global economic environment caused by the policy shifts in the United States.
EastWest Bank Chief Executive Officer Jerry G. Ngo said at a media briefing following their annual stockholders’ meeting on Thursday that he remains confident that the listed lender can sustain the double-digit income growth they have seen in recent years, barring systemic and economic shocks from recent global trade developments stemming from the Trump administration’s tariff policies.
The bank saw its net income increase by 25% year on year to a record P7.608 billion in 2024. In 2023, its attributable profit also grew by an annual 32%.
“What gives us confidence … is the quality of our growth was not really reliant on any one-time gains. It’s all focused predominantly on core businesses. Over the past few years, we’ve focused on rebalancing the portfolio, embedding smarter risk controls, refining the way we serve our different customer segments, and this groundwork is now delivering consistent quality results,” Mr. Ngo said.
“I think more importantly, we’re not chasing volume for the sake of volumes. We’re building what I would like to claim to be a durable business now. The mix of our customer loan portfolio now is more resilient. Our deposit base is stable and our digital infrastructure is now built to scale. Our performance in 2024 isn’t just a rebound.”
The official said the challenge would be getting incremental volume and income moving forward to combat base effects.
“What we believe is that the operating model is now able to generate economies of scale, and I think that’s the most important thing. The infrastructures [and the] groundwork are put in place. There’s still a lot to go, but… our clients are starting to see and feel them, probably in terms of delivery channels, faster turnaround times, online capabilities, apps that are really, really responsive to their needs. So, it’s about growing with intention and also growing in the right way… I think we’re really excited about what the future holds for EastWest Bank,” Mr. Ngo said.
He added that the bank is expected to benefit from lower funding costs resulting from cuts in key interest rates as a negatively-gapped lender.
The bank is also looking to boost its digital services to expand its customer reach, he said.
“We are doing more embedded banking and more ecosystem partnerships. It should allow us to tap into a growing pool of newly-banked clients, and that allows us to help them graduate from the informal sector to the formal sector,” Mr. Ngo added.
Meanwhile, he said the bank is looking to raise at least P10 billion from the domestic bond market under a new fundraising program.
“I think we are looking at [raising] P10 billion in the initial stage, but of course the shelf will be much higher. It really depends on where the interest rates are at the moment.”
Mr. Ngo said in August last year that the bank was looking to raise up to P10 billion from bond issuances in several tranches and tenors.
On Thursday, he said the bank is setting up a new fundraising program. EastWest Bank in 2023 approved a P30-billion bond program that was set to be issued over five years.
The listed bank last tapped the domestic bond market in February 2020, raising P3.7 billion from an issuance of three-year fixed-rate bonds.
“I think it’s going to be a matter of price and liquidity… The recent reserve requirement cuts by the BSP (Bangko Sentral ng Pilipinas) are starting to kick in and will create more liquidity in the market… Hopefully that will then allow us to tap into the market and to that pool of liquidity,” Mr. Ngo said.
“As you know, our CASA (current and savings account) ratio is still fairly strong. Our funding base is stable. We are growing in line with what our asset growth is. So, I think that that can still be sustained quite well.”
The BSP in March cut the reserve requirement ratios (RRR) of universal and commercial banks and nonbank financial institutions with quasi-banking functions by 200 basis points to 5% from 7%.
It also reduced the RRR for digital banks by 150 bps to 2.5%, while the ratio for thrift lenders was lowered by 100 bps to 0%.
Rural and cooperative banks’ RRR has been at zero since October 2024.
The central bank has brought down banks’ reserve ratios to single-digit levels from the high of 20% set for big banks in 2018.
Meanwhile, the Monetary Board on April 10 resumed its rate-cutting cycle, reducing benchmark borrowing costs by 25 basis points (bps) to bring the policy rate to 5.5%.
BSP Governor Eli M. Remolona, Jr. said they will likely continue cutting rates further this year in “baby steps” or increments of 25 bps.
There are four more Monetary Board policy meetings this year, with the next slated for June 19.
EastWest Bank’s shares declined by 12 centavos or 1.14% to close at P10.44 each on Thursday. — A.M.C. Sy
