UCPB net income rises 11%

MANILA, Philippines—United Coconut Planters Bank posted an 11-percent year-on-year growth in first-quarter net profit to P640 million as a double-digit rise in interest and fee-based income compensated for the much-anticipated slack in trading gains.

With the performance, the bank said it was on track to surpass this year the P2.4-billion full-year net income it reported in 2010.

Due to the limited opportunities for trading gains in the first quarter, the bank focused on building its loan portfolio, expanding its deposits and improving the fund mix and generating more fee income, UCPB executive vice president and chief operating officer Cesar Rubio said in a press statement.

UCPB’s total loans reached P47.6 billion in end-March, 11 percent higher than a year ago. The growth in the loan book allowed the bank to expand its interest income by 11 percent to P2.1 billion from a year ago.

On the funding side, the growth in assets was funded by a similar 11-percent rise in deposit base to P144.5 billion from a year ago. Bulk of deposit growth came in the form of low-cost current account and savings account, enabling the bank to cut its interest expense by 18 percent to P519 million.

The combination of higher loan volume, lower cost of funds and better interest margins boosted UCPB’s net interest income by 19 percent to P1.5 billion, the bank said. Revenues from service charges, fees, commissions and other non-interest income sources also rose 14 percent year on year to P234 million. Earnings from subsidiaries went up 5 percent to P92 million.

Rubio said the second quarter should be a stronger period for UCPB as five new branches that opened in the last quarter of 2010 were expected to bring in business. The new UCPB branches are in Alabang, Muntinlupa; Global City, Taguig; Malabon; and Bacoor and Dasmariñas, both in Cavite, which all host large residential communities and small- to mid-sized businesses that offer huge markets for retail deposits, and middle market and consumer loans.

The bank plans to open at least five more branches this year to sustain deposit and loan growth. UCBP’s total resources as of end-March stood at P174.8 billion.