Aboitiz-led Union Bank of the Philippines grew its net profit in the first four months by 28.1 percent year-on-year to P2.4 billion, driven by a double-digit expansion in interest income and fee-based earnings.
About two-thirds of UnionBank’s earnings in January to April came from interest income from core lending activities while one third was derived from treasury business.
In a briefing after the bank’s stockholders meeting, UnionBank president Edwin Bautista said growth had been fastest on the consumer side where loan spreads were bigger. “That’s why even our margins are much bigger,” he said.
Net interest margin in the first four months averaged around 4 percent, higher than most industry peers.
Thrift bank unit City Savings Bank accounted for about a third of Union Bank’s consolidated profits in the first four months.
Net interest income grew by 34.6 percent year-on-year while fee-based earnings rose by 12.1 percent. Treasury earnings were down from last year.
Bautista said Union Bank, which used to have one of the lowest loan to deposit ratios, had anticipated that the opportunities for securities trading gain would be limited moving forward.
About 45 percent of core earnings last year came from the consumer business, 30 percent from corporate clients and 25 percent from the middle market or small and medium enterprises.