China Banking Corporation, the country’s fourth largest universal bank by market capitalization, reported a 40.7 percent growth in net income for the first nine months of 2009 to P3.21 billion from the P2.28 billion recorded for the same period last year.

In a disclosure to the Philippine Stock Exchange, the bank said this income performance translates to a 15.53 percent return on equity and a 2.02 percent return on assets, among the highest in the industry.

China Bank’s robust growth was driven by a 22.8 percent increase in revenues to P13.02 billion as non-interest revenues rose 68.4 percent, boosted by higher trading and forex gains and revenues from disposal of acquired assets.

Net interest revenues before loan loss provisions jumped 29.5 percent, driven by stronger lending and improved margins arising from continued growth in low-cost deposits.

China Bank emergerd as one of the most cost-efficient banks in the country with cost-to-income ratio improving to 55.8 percent from 58.7 percent for the same period last year, even as it continued to pursue the largest branch expansion program in its 89-year history coupled with investments in more ATMs and new technology platforms.

“With our continued focus on improving service, strengthening our balance sheet, and effective management of risks, we were able to sustain our growth momentum for this year. Our double digit growth is underpinned by our commitment to consistently deliver strong shareholder value,” said China Bank executive vice president Ricardo R. Chua.

Total assets slightly increased, by 2.80 percent, to P214.39 billion from December 2008 level. To further strengthen its balance sheet, provisions for probable credit losses were more than doubled from P200 million to P493 million, bringing China Bank’s loan loss coverage ratio to 112.21 percent from 82.55 percent last year.

The Bank continues to leverage the growth of its distribution network. Total deposits reached P174.04 billion, with the ratio of CASA to total peso deposits further improving to 42 percent.