Aboitiz-led Union Bank of the Philippines grew its 2013 net profit by 19 percent to P9.02 billion as the bank boosted its lending portfolio, reduced reliance on the treasury business and gained from the acquisition of thrift bank City Savings.
This marked the fifth straight year of record-high earnings for the bank and was in line with its goal of boosting net profit by at least P1 billion a year, Union Bank president Victor Valdepeñas told the Inquirer.
Last year’s profit translated to a return on equity of 19.6 percent for Union Bank, higher than the 16.9 percent in 2012.
“If our expectations are realized, this will bring us to over P10 billion (in net profit) for 2014 and we anchor that growth on our corporate and consumer businesses,” Valdepeñas said. “We expect to grow further while we know that it will be a difficult capital market with bond yields expected to move higher.”
Union Bank is forecast to breach P500 billion in total resources by end-2014. Last year, it expanded its balance sheet by 42.3 percent to P398.4 billion, supported by an 18.7-percent growth in its loan book to P142.12 billion.
“Our performance for 2013 is very different compared to the previous year. This time our earnings are broad-based. Our consumer businesses contributed very significantly compared to last year and also our acquisition of City Savings contributed almost P870 million to the bottomline,” Valdepeñas said. The bank continued to improve its credit card business while earnings from corporate and commercial lending went up by almost P1 billion, he added.
“While treasury earnings have improved compared to last year, what really spelled the difference was the contribution of all our nontreasury business,” he pointed out.
Another big factor behind the 2013 performance was a significant reduction in cost of funds in line with the reduction in interest rate while asset yields were broadly steady, he said. Doris C. Dumlao