UBP keeps 10-15% growth goal
By Bruce Rodriguez, Doris C. DumlaoPhilippine Daily Inquirer
The large trading gains that boosted the profitability of most Philippine banks in the first quarter may be difficult to sustain for the rest of the year due to uncertainties arising from the eurozone, said the chief of Union Bank of the Philippines.
Aboitiz-led Union Bank is thus keeping a conservative profit growth goal of 10-15 percent for 2012 even if the bank’s bottom line had quadrupled in the first three months, said bank president Victor Valdepeñas.
“I expect that the next three quarters would not be that strong,” he said, adding that the world capital markets were in a volatile situation.
“Since we made a lot in the area of capital markets, we will try to be more guarded as far as the future in the capital markets is concerned,” Valdepeñas told reporters after the bank’s annual stockholders’ meeting on Friday.
The banker said it would be difficult to predict whether the large trading gains could be sustained for the rest of the year. “We cannot predict what will happen on the euro banks, the sovereign bonds in emerging markets. All you know is that the markets are very volatile, so you have to act very fast,” he said.
But while Valdepeñas is not banking on the continued flow of large trading gains, he is more confident on the lending side of the business.
“We’ve been growing our customer base, expanding our load and we are more aggressive now in the area of consumer financing,” Valdepeñas said.
Union Bank had expected loan growth this year to hit 15-20 percent in line with industry growth. But Valdepeñas said his bank might exceed this growth target as consumer loans were growing by more than 30 percent, particularly auto loans and mortgages.
In the first quarter, Union Bank’s net profit hit a quarterly record high of P2.84 billion, up from only P708.28 million in the same period last year. This was fueled by the surge in net trading gains to P2.65 billion from only P187 million a year ago.
The three-month performance brought the bank’s return on equity to 26 percent as Union Bank earned as much profit as what was reported for the first quarter by the country’s largest bank, Banco de Oro Unibank.
Given the uncertainties in the eurozone, Valdepeñas said the bank would not change its 10-15 percent bottom-line goal for the year.
Follow Us
Recent Stories:
Short URL: http://business.inquirer.net/?p=61957
Tags: Banking , Earnings Forecast , Union Bank of the Philippines
