UnionBank earnings up 8% in first half of 2018

MANILA, Philippines — Earnings of Aboitiz-led Union Bank of the Philippines climbed eight percent in the first half on the back of the strong growth in consumer businesses.

Jose Emmanuel Hilado, treasurer and chief finance officer at UnionBank, said the bank’s net income amounted to P4.7 billion from January to June compared to P4.36 billion in the same period last year.

“We are ahead of our target for the year despite margin compression in the first half due to higher interest rates and regulatory compliance. For the remainder of the year, we expect recurring income to drive profitability. We anticipate margins to improve as loan rates start to catch-up against deposit cost,” he said.

The bank’s net revenues went up by more than nine percent to P12.7 billion from P11.7 billion a year ago, translating to a higher annualized return on equity (ROE) and return on average assets (ROA) of 12.8 percent and 1.6 percent, respectively.

UnionBank sustained its robust performance from last quarter given double-digit growth in customer businesses.

Total loans jumped 18 percent year-on-year to P313 billion, with retail loans accounting for 33 percent of total loan portfolio.

This boosted the bank’s total assets by nearly 13 percent to P623.2 billion in the first half from P552.6 billion in the same period last year.

UnionBank’s deposit base inched up 4.3 percent to P452.9 billion from P434.16 billion supporting the bank’s total resources in the first semester.

Last year, the bank’s net income slipped 16.4 percent to P8.42 billon from P10.07 billion in 2016 due to lower trading gains amid the volatile global financial markets.

UnionBank president and CEO Edwin Bautista said the bank is on track with its digital transformation journey.

“The market has noticed. The bank was recognized as Asia’s Best bank Digital Transformation in the 2018 Euromoney Awards for Excellence. Moreover, our Project i2i in collaboration with rural banks, was highlighted in the technology space as a commendable use case of blockchain to drive societal change and inclusive prosperity,” Bautista said.

Bautista said UnionBank is launching more innovations in the industry as we aim to be among the pioneers in the field of blockchain technology and the token economy.