Aboitiz-led Union Bank of the Philippines booked an 11.22 percent year-on-year growth in first semester net profit to P4.36 billion on higher interest earnings and fee-based businesses.
For the second quarter alone, Union Bank’s net profit fell by 6.9 percent year-on-year to P2.15 billion as growth in expenses outpaced the expansion in revenues.
Net interest income in the second quarter rose by 11.3 percent year-on-year to P4.15 billion while non-interest income rose by 2.23 percent year-on-year to P1.79 billion.
However, expenses in the second quarter rose by close to 21 percent year-on-year to P3.24 billion as the bank invested more on manpower and likewise shelled out more for taxes and licenses.
For the whole of the first semester, Union Bank grew its net interest income by 11 percent year-on-year to P8.07 billion while fee-based income also expanded by 13 percent to P2.24 billion.
The bank also booked a modest trading gain of P38.42 million, a turnaround from the loss of P127.33 million in the same period last year.
Union Bank is aiming for “zero trading gains” this year and is instead working to grow earnings from financial intermediation.
Meanwhile, the bank’s expenses rose by 17.5 percent year-on-year to P6.18 billion.
This year, the bank’s capital expenditure budget is P3 billion this year, its highest capital expenditure budget in a single year, mostly to fund the bank’s digital transformation and shift to recurring earnings stream. This is triple the usual P1 billion that the bank had spent yearly in the past.
The bank ended the semester with P552.63 billion in total resources compared to P524.43 billion in the same period last year.