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East West confident in China investments despite contentious tariff environment


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East West confident in China investments despite contentious tariff environment

East West Bancorp Inc. is still comfortable investing in China, despite its "contentious and competitive" tariff debates with the U.S., executives said.

During a call to discuss second-quarter earnings, East West President and CEO Dominic Ng acknowledged the turbulent tariff environment between the U.S. and China, but said bank leadership remains confident in its China play. The Pasadena, Calif.-based bank has eight branches in the country.

Ng had a positive outlook on future investments in China, saying there are still plenty of opportunities for the bank to provide advisory services to U.S. customers looking at doing business in China and vice-versa.

Ng said the current tariff environment provides the bank an opportunity to act as a financial bridge between the two economies by providing clients with expertise regarding changing dynamics. To do that, the bank is determined to be the most proficient when it comes to U.S.-China relations, Ng said.

"As long as we have that better knowledge and better expertise, we always know how to navigate under whatever circumstances," he said.

Also on the call, executives projected loan growth of 10% by the end of the year, despite the ongoing tensions with China. Ng said diversification of the loan portfolio is key to achieving that guidance.

"We will continue ... making sure that we will never get ourselves caught in a situation that we have over-concentration in any particular category which would result in undue risk," he said.

While acknowledging that tariff tensions pose potential risks, Ng said second-quarter earnings results are a good testament for what to expect for the rest of the year and into 2020. East West reported adjusted second-quarter EPS of $1.24, up from $1.18 a year earlier and above the S&P Global Market Intelligence normalized EPS consensus estimate of $1.23.