Union Bank profit growth eases
Union Bank of the Philippines’ first semester net profit eased by 48.8 percent year-on-year to P3.17 billion in the absence of the extraordinary trading gains that had boosted its earnings the previous year.
The banking arm of the Aboitiz group expects to end the year with a net profit of P7-P7.5 billion—lower than the P9 billion seen last year, bank president Victor Valdepenas said in an interview Saturday.
Valdepenas said that its thrift bank subsidiary City Savings Bank contributed around P800 million to Union Bank’s bottomline in the first semester.
“We expect that to [reach] P1.2 billion in the second half because growth momentum will be greater,” Valdepenas said, referring to the parent’s profits.
City Savings, which focuses on lending to teachers, will likely end this year with a net profit contribution of P2 billion, partly offsetting the sharp decline in treasury gains this year, Valdepenas said.
For the second quarter alone, Union Bank’s net profit eased by 25.6 percent year-on-year to P1.63 billion, based on the bank’s regulatory filing. Second quarter net interest income went up by about a third year-on-year to P2.68 billion, but other income fell by 43.5 percent to P192 billion due to the 75-percent fall in net trading gains to P566.46 million compared with that of the same period last year.
While its 2014 earnings are not expected to be as strong as the previous year, Union Bank is still growing its core earnings, thus increasing the share of its durable earnings stream, Valdepenas said. In the first half, Union Bank boosted its net interest income by 29 percent year-on-year to P5.24 billion while fee-based earnings jumped by 61 percent to P1.61 billion. Doris C. Dumlao
