Asia United Bank’s net profit grows by 7.6% to P879.5M in first half of 2014
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MANILA, Philippines — The Rebisco group’s banking arm Asia United Bank grew its six-month net profit by 7.6 percent year-on-year to P879.5 million on a double-digit growth in core lending and a recovery in treasury earnings, bucking the downturn seen by most of its banking peers.
A strong comeback was seen in the second quarter, with net profit surging by 147 percent year-on-year to P674.2 million, thereby offsetting the bottom-line contraction posted in the first quarter. The second quarter rebound was attributed to a result of the 0.8 percent growth in the group’s net interest income and a 181.9 percent increase in its operating or non-interest income, which compensated for the higher operating expenses and provision for income tax.
AUB’s net interest income for the six-month period grew by 52.8 percent year-on-year to P1.89 billion on the back of a stable net interest margin of 4.35 percent.
The group’s other non-interest income excluding securities trading gain also grew by 163.6 percent year-on-year to P690.134 million for the six-month period due to the following factors:
* Higher service charges, fees, and commissions from new bookings of commercial/consumer loans as well as higher volume of branch transactions and remittances;
* Higher miscellaneous income due to gains on sale of foreclosed properties and miscellaneous fees from operating lease income; and
* Foreign exchange gain in the first six months of the year coming from a loss in the same period in 2013.
On the expenditure side, operating expenses grew by 33.37 percent year-on-year to P1.65 billion, driven by higher compensation and fringe benefits as a result of the additional headcount in the new branches, lending units, and operations and a retroactive adjustment of merit increases.
Provision for credit losses also rose 66.4 percent on account of a higher general loan loss provision in line with the loan portfolio growth.
