UCPB expects better margins in 2nd semester

United Coconut Planters Bank (UCPB) posted a net profit of P2 billion, flat from the same period last year, amid a highly challenging operating environment that tightened margins and limited trading opportunities.

Total revenue rose by 8 percent year-on-year in the first six months to P8.67 billion, reflecting higher interest and non-interest income.

Six-month interest income in the comparative period rose by 9 percent year-on-year to P7.45 billion due to higher loan volume.

The bank grew its loan book by 10 percent year-on-year to P174.09 billion, driven by the continued strong demand for consumer loans, primarily from the real estate segment.

Despite a lower income from fixed income securities, non-interest income went up by a modest 3 percent year-on-year to P1.22 billion due to higher fees, mainly from bancassurance, or cross-selling of insurance products in its branches, coupled with higher foreign exchange gain.

The growth in operating income in the first semester of 2018 was tempered by higher cost arising from an increase its loan loss provisions.

“We see margins improving in the next semester as we align loan rates with the increased deposit rates which should boost revenues from our lending business. Consumer banking and bancassurance will be our main revenue drivers for the rest of the year,” said UCPB president and chief executive officer Higinio Macadaeg.

The UCPB Trust Banking Group’s peso bond fund was recently awarded by the Chartered Financial Analysts Society of the Philippines as the “Best Managed Fund” under the category of long-term bond funds using pure fair value through profit and loss valuation. —DORIS DUMLAO-ABADILLA