The Aboitiz family’s Union Bank of the Philippines has secured regulatory approval to distribute earnings to shareholders, covering about a quarter of last year’s profits.
A disclosure to the local bourse yesterday showed UnionBank’s cash dividend was about half of what was paid last year. This follows a stock dividend in November last year, which funded a required hike in the company’s capital stock by 25 percent.
“We are pleased to advise you that the Bangko Sentral ng Pilipinas (BSP)… has approved the cash dividend declaration of the bank,” UnionBank told the Philippine Stock Exchange (PSE).
Each shareholder will get P2.10 for every stock held. The total amount payable is P2.22 billion, the bank’s disclosure showed. Record and payment dates for the transaction have yet to be set by the bank’s board.
UnionBank’s cash dividend last year was P4.40 per share.
Last year, the Aboitiz-led bank booked a net profit of P8.4 billion last year, 6.9 percent lower than the the level in the previous year in line with industry-wide decline in treasury gains in the first semester.
Profits of the country’s 36 universal and commercial banks fell by 8.17 percent in 2014 as interest margins thinned. Net interest income in 2014 rose to P261.75 billion, higher by 17 percent than the P223.19 billion recorded in 2013. However, non-interest income took a dive to P127.49 billion from P152.83 billion, while non-interest expense rose to P238.99 billion from P223.49 billion.
For this year, UnionBank expects to grow its net profit by 10 to 15 percent, or as much as P1.2 billion over last year’s level, officials said.
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.
The bank’s loan book declined last year by 1.9 percent to P139.36 billion. This was part of the bank’s strategy to shift lending to the consumer and retail segments. The strategy enabled the bank to grow its net interest earnings by 21.53 percent to P10.78 billion despite the decline in loan volume. Paolo G. Montecillo