China Banking Corp. has posted a 7-percent decrease in its first-quarter net income to P703 million on higher costs arising from the integration of Manila Bank branches into its network.

The bank, which is partly owned by conglomerate SM Investments Corp., said revenues for the first three months improved by 4 percent to P3.43 billion while interest income from loans grew 13 percent year-on-year.

Operating expenses rose 11 percent as a result of the programmed expansion and integration of Manila Bank branches completed in February 2008. Also reflected are one-time expenses related to a collective bargaining agreement with the employees' union.

China Bank said its total capital funds reached P26.8 billion, translating to a capital adequacy ratio of 14.59 percent.

This year, the bank targets to open 58 branches nationwide in line with its aim to put up 200 branches by 2010.

To date, China Bank has 198 branches, with 17 branches opened during the first quarter.

China Bank had announced its plan to issue long-term negotiable certificates of time deposit (LTNCD) worth up to P8 billion.

In a letter to the stock exchange, the bank said it would issue the LTNCD in one or more tranches and subject to the central bank's approval.

"The planned LTNCD issuance will expand the issuer's long-term deposit base and support the bank's long-term asset growth," it said.

China Bank also declared a 20-percent or P20 per share cash dividend and a 15-percent stock dividend to shareholders. Record and payment dates have yet to be announced.

Its board also approved the increase in its authorized capital stock from P16 billion to P20 billion.