Aboitiz-led Union Bank of the Philippines grew its first quarter net profit by 33 percent year-on-year to P2.9 billion mostly due to extra-ordinary gains from its investment portfolio.
Union Bank is also preparing to expand its lending activities and support the growing domestic economy with a plan to raise P10 billion by selling new shares to existing shareholders.
The additional capital from the stock rights offering – recently approved by the bank’s board of directors – will increase the bank’s common equity tier 1 and total capital adequacy ratio and fuel asset growth, Union Bank disclosed to the Philippine Stock Exchange on Monday.
“Given our positive earnings performance in the first quarter, we are confident that we can attain our full-year target,” Union Bank treasurer and chief financial officer Jose Emmanuel Hilado said in a press statement on Monday.
“We recognized gains from our investment portfolio following the adoption of the new PFRS (Philippine Financial Reporting Standards) 9 accounting standards,” Hilado said.
Union Bank’s first quarter results resulted in an annualized return on equity and return on average assets of 15.9 percent and 2 percent, respectively.
“We started the year strong. Our solid profitability results are quite timely as it allows us to fast-track our investments in digital transformation. We made it clear at the start of the year that we will invest in blockchain technology for our internal operations and the inevitable internet of finance,” said Edwin Bautista, UnionBank president and chief executive officer.