UCPB eyes P4-B earnings this year

MANILA, Philippines - The United Coconut Planters Bank (UCPB) is looking at a net income of between P3.6 billion to P4 billion in 2012, despite strong pressures from volatile world oil prices, the negative impact of the Greek credit crisis, and the lingering internal questions of ownership.

The commercial bank’s unaudited net income in 2011 was reported at P3.05 billion, 25 percent better than the P2.45 billion in 2010. It stood at P1.66 billion in 2009.

UCPB president and chief executive officer Jeronimo U. Kilayko said that among the reasons for improved earning last year was the replacement or renegotiated -replaced high-yielding deposit products.

Kilayco was referring to the Double Your Money with low cost Long Term Negotiable Certificates of Deposits (LTNCDs) and high yielder, which offered unreasonable returns.

“We were able to correct them,” he said.

The bank president likewise said they will expand the remittance business to be able to increase fee-based earnings and foreign currency trading gains.

Kilayko admitted that a remittance team had been dispatch to establish new alliances with foreign financial institutions including international money transfer companies, correspondence bank relationships, as well as strengthen existing ties.

“We are late in the game, but we can grow from existing alliances,” he added.

Other reasons for the bank’s impressive earnings performance last year were better interest income due to growth in loan portfolio, better treasury trading income, dispatched real and other properties owned or acquired (ROPOAs), higher low cost checking account, savings account (CASA), increased loan bookings, and the significant income contribution of its subsidiaries.

Out of the P57.5-billion total loans booked in 2011, P42 billion or 73 percent came from the corporate segment.

However, the biggest growth came from the consumer loan segment, which expanded by 34 percent to P15.5 billion from 11.6 billion from a year ago.

Total deposits increased by 7.4 percent, or from P149.9 billion in 2010 to P161 billion with CASA comprising 68 percent of the total last year.

Non-interest income fell by 13.6 percent to P1.9 billion from P2.2 billion in 2010, due mainly by the change in government policies on clearing as well as lower foreign exchange gains due to the strengthening of the peso. 

UCPB was able to reduce its operating expense in 2011 by 13 percent from P5.4 billion to P4.7 billion as the bank embarked various automation projects designed to streamline the bank’s processes.

Capital adequacy ratio (CAR) increased to 11.92 percent from 10.6 percent.