COMMERCIAL bank United Coconut Planters Bank posted a 7-percent growth in first-semester net profit to P1.3 billion on higher earnings from consumer lending, fee-based businesses and trading gains.
In a press statement, UCPB president Jeronimo Kilayko expressed confidence that UCPB would be able to sustain its growth momentum and that recapitalization initiatives would resume “in due time” to boost the bank’s growth.
In the first semester, UCPB’s net interest income improved by more than 2 percent year-on-year as the bank unlocked higher yields from its consumer loan portfolio even as its total loan book declined.
The bank’s lending volume dropped by 3 percent year-on-year in the first semester, weighed down by the 13-percent fall in corporate and commercial loans against the backdrop of continued liquidity in the domestic market.
On the other hand, consumer loans grew by 28 percent year-on-year, reflective of the country’s economic growth and increased consumer income levels.
Total non-interest income in the first six months also increased by 3.2 percent year-on-year to P1.2 billion, led by the 7-percent growth in service fees and trading gains.
On the funding side, UCPB’s total deposit levels improved by more than 6 percent. This was marked by a 14-percent year-on-year improvement in low-cost deposits to P157 billion that in turn allowed the payoff of pricier time deposits which declined by 11 percent to P50 billion. As a result, UCPB reduced interest expense on deposits by more than 7 percent.
On the other hand, operating expenses rose by a slight 2 percent even with the 10-percent increase in manpower cost with improvements in employee compensation and benefits alongside an increase in consumer business-related headcount.
In terms of asset quality, non-performing loans were contained at less than 3 percent of gross loan portfolio as the bank improved credit quality processing and risk management particularly in the consumer lending business.
The government was set to bid out a controlling stake in UCPB to pave the way for its capital build-up program but was prompted to suspend this after the Confederation of Coconut Farmers Organizations of the Philippines obtained a temporary restraining order from the Supreme Court last month. The farmers’ group accused President Aquino of committing “grave abuse of authority” when he issued the order to privatize the stake in the sequestered bank.