UnionBank gains 40% more profit in 9 months

MANILA, Philippines — Aboitiz family-led Union Bank of the Philippines posted a 40 percent jump in net income to P8.51 billion in the first nine months from P6.1 billion in the same period last year.

Edwin Bautista, president of UnionBank, said the listed bank did very well from January to September this year as it continues its digital transformation program.

“Our digital transformation plans are ahead of schedule. We recorded solid growth across the different business segments,” he said.

He pointed out its thrift banking arm City Savings Bank Inc. delivered around P15 billion in salary loans and released 9,000 motorcycles during the third quarter after completing its merger with Philippine Resources Savings Bank Corp. (PR Savings Bank) – a member of motorcycle and agricultural machinery distributor Ropali Group.

Bautista said the Aboitiz-led bank recorded substantial improvement in margins and trading gains from favorable market conditions.

The sustained double-digit growth in earning assets and strong trading gain, the bank said, led to the higher net income.

The bank’s earnings result translated to above-industry return on equity (ROE) of 12.6 percent.

Its total assets went up by 6.6 percent to P685.8 billion in end-September from P643 billion in end-September last year.

UnionBank’s loan book recorded a double-digit 10 percent rise to P346.3 billion from P315.3 billion.

Its lending to small and medium enterprises (SMEs) surged by 42 percent followed by its credit card business that jumped by 37 percent, consumer loans with 31 percent, and commercial lending with 13 percent.

For his part, UnionBank treasurer and chief financial officer Jose Emmanuel Hilado said the bank’s earnings were boosted by strong trading gains as well as improvement in margins.

“Net interest margin in the third quarter increased by 100 basis points compared to the start of the year. Additionally, consumer and middle-market loans sustained healthy growths,” Hilado said.

UnionBank is raising as much as P20 billion through the issuance of unsecured subordinated debt eligible as Tier 2 capital.

Last October, the bank launched a P70-billion funding program consisting of offshore borrowings as well as domestic borrowings through the stock rights offering, issuance of long term negotiable certificates of deposits (LNTCDs), among others.

Last May, the bank raised P5.8 billion via the issuance of three-year peso-denominated bonds after raising P11 billion from the issuance of two-year fixed-rate bonds in December. These were part of the bank’s P50-billion bond or commercial paper program.