Rebisco group-led Asia United Bank grew its net profit in the first six months by 44 percent year-on-year to P1.23 billion on strong gains from lending and trading activities.
The AUB group—composed of the listed universal bank AUB and two rural banks (Rural Bank of Pampanga and Cavite United Rural Bank)—expanded its interest income by 25 percent to P3.5 billion in the first six months.
Earnings were driven by a 28.6-percent year-on-year expansion in AUB’s loan book to end the six-month period at P2.7 billion.
Trading income also improved, the bank reported to the Philippine Stock Exchange on Friday.
At present, 80 percent of the bank’s earnings are derived from lending while only 20 percent are generated from the treasury business—a reversal of the mix years ago when about 70 percent of the earnings came from the volatile treasury business.
AUB seeks to become a more significant player in the banking system by doubling its branch network while maintaining its long-term profitability at around 10 to 15 percent return on equity.
AUB has 222 branches and employs around 1,800 people. It ranks among the country’s top 20 banks with assets worth P155.4 billion, 18 percent higher year-on-year.
This year, AUB sees challenges from continuing market volatility, entry of new foreign banks with the liberalization of the industry, high liquidity that keeps asset yields low, additional capital adequacy ratio and other regulatory requirements as well as high information technology (IT) security threats.
In terms of net interest margin (NIM), AUB sees it a tall order to maintain the 4.3 percent level seen last year.
However, AUB expects to maintain NIMs above the industry average of around 3 percent.