Unionbank profit down 24% at end-March

Aboitiz-led Union Bank of the Philippines’ first quarter net profit dropped by 24 percent to P2.2 billion in the absence of large trading gains that boosted the comparative income last year.

For the full year, however, Unionbank president Edwin Bautista said the bank could still “definitely achieve” a double-digit growth in net profit as earnings pick up pace in the next quarters.

For the first three months, he said the profit decline was “because of large non-recurring income in the first quarter 2018.” Relative to the bank’s internal quarterly target, Bautista said this was 15 percent “over the budget.”

Compared to the fourth quarter of 2018, Unionbank’s first quarter net profit rose by 75 percent as the bank expanded its earning assets and tightened spending, Unionbank disclosed to the Philippine Stock Exchange on Monday.

Net interest income during the first quarter increased by 12.5 percent year-on-year to P4.66 billion as the banking group grew its loan book on a consolidated basis by about 12 percent year-on-year to P315 billion. For the parent bank alone, the loan book expanded by 16 percent year-on-year.

About a third of customer loans now consisted of retail loans. Unionbank’s thrift bank arm CitySavings, for instance, is a big provider of salary loans to teachers.

Unionbank’s first quarter performance translated to a return on equity of 9.6 percent and return on assets of 1.3 percent.

For every P1 spent by the bank, it earned P1.60 in revenues in the first three months. —DORIS DUMLAO-ABADILLA