Union Bank ’14 net profit down by 6.9%

UNION BANK of the Philippines chalked up a net profit of P8.4 billion last year, 6.9 percent lower than the previous year in line with industry-wide decline in treasury gains in the first semester.

This 2015, the bank of the Aboitiz group expects to grow its net profit by 10 to 15 percent, or as much as P1.2 billion over last year’s level, Union Bank president Victor Valdepenas said in a phone interview Saturday.

Its thrift bank unit, City Savings, may likely contribute P2.5 billion to the bottom line, Valdepenas added.

Union Bank was the first publicly listed bank to report full-year earnings.

In the fourth quarter of 2014, the bank generated about P3.4 billion in net profit. In the first nine months, it reported P5 billion in net profit.

“We had a very good trading income in the fourth quarter because of the softening of the market, both in interest rate as well as foreign exchange. We were able to capitalize on that,” Valdepenas said.

And because of City Savings’ strong returns, Union Bank was able to temper the widely anticipated industry-wide decline in net profit in 2014, Valdepenas said. The thrift bank unit contributed P1.8 billion in net profit last year, exceeding earlier expectations of a P1.4-billion share.

The bank’s loan book declined last year by 1.9 percent to P139.36 billion, Valdepenas said. This was part of the bank’s strategy to shift lending to the consumer and retail segments. Union Bank was then able to grow its net interest earnings by 21.53 percent to P10.78 billion despite the decline in loan volume.

Valdepenas also noted that the bank’s credit card, mortgage and auto had shown stronger returns throughout the year.