Union Bank profit up 33%; sets P10-B offer

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 extraordinary gains from its investment portfolio.

Union Bank is also preparing to expand its lending activities and supporting the growing domestic economy with a plan to raise P10 billion in fresh capital 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.

“We recognized gains from our investment portfolio following the adoption of the new PFRS (Philippine Financial Reporting Standards) 9 accounting standards,” Hilado said.

The bank grew its three-month net interest income to P4.14 billion, up 5.1 percent. Total loans grew by 15.9 percent to P293.1 billion year-on-year, with consumer loans accounting for 34 percent of total loan portfolio.

However, net gains from the sale of trading and nontrading financial assets were much more significant, reaching P1.48 billion compared to the restated level of P244 million in the same period last year.