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UnionBank H1 profit up 2% to P4.8 B

Lawrence Agcaoili (The Philippine Star) - July 30, 2019 - 12:00am

MANILA, Philippines — Earnings of Aboitiz-led Union Bank of the Philippines inched up by almost two percent to P4.79 billion in the first half from P4.71 billion in the same quarter last year after a robust performance in the second quarter.

In a disclosure to the Philippine Stock Exchange (PSE), the listed bank said it sustained the growth of earnings assets despite lower margins and strategic investment in its digital transformation.

“Higher fee income from consumer businesses and securities trading gains also contributed to the improved bottomline in the first half of 2019,” the bank said in a statement.

The bank’s net interest income went up by 17.8 percent to P9.84 billion from January to June compared to P8.35 billion in the same period last year as interest income surged 38.7 percent to P18.51 billion, while interest expense jumped by 74 percent to P4.99 billion.

On the other hand, the bank’s other income from service charges, fees and commission as well as gains from the sale of investment securities and trading of financial assets remained steady at P4.36 billion, while operating expenses increased by 15.2 percent to P8.39 billion in the first half.

For the second quarter alone, the bank’s net income jumped by 44.4 percent to P2.6 billion from P1.78 billion in the same quarter last year.

The country’s 9th largest lender in terms of assets added profitability and efficiency ratios were above industry and better than year end 2018 with return on equity at 10.6 percent, return on assets at 1.4 percent, and revenue-to-expense ratio at 1.7 times.

UnionBank treasurer and chief finance officer Jose Emmanuel Hilado said the continuous improvement of the bank’s margins contributed to strong topline results.

“Operating expenses growth was also kept manageable amid the integration of PR Savings Bank with CitySavings and continued investments in digital transformation. We are optimistic that we can sustain this momentum for the rest of the year, with potential upsides to our margins, as interest rates start to normalize,” Hilado said.

UnionBank’s total assets increased by 13 percent to P704.5 billion in the first half.

The bank’s customer loan book reached P328.3 billion as of end-June on the back of the 39 percent jump in credit card loans, 31 percent increase in its consumer business and 16 percent increase in commercial loans.

UNION BANK OF THE PHILIPPINES
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