Union Bank expects profits to grow in double digits

MANILA, Philippines—The Aboitiz-led Union Bank of the Philippines expects to grow its net profit in 2011 by a double-digit level to hit a new record despite a more challenging environment arising from higher interest rates and external volatilities.

In an interview after Union Bank’s annual stockholders’ meeting last Friday, bank president Victor Valdepeñas told reporters that net profit growth would not likely be as hefty as 2010’s, which was an extraordinary period for the banking industry. “But we still see double-digit growth this year, maybe 10-15 percent. I will be happy with that,” Valdepenas said.

This suggested that Union Bank could post a net profit of between P5.88 billion and P6.15 billion, topping last year’s record high level.

In 2010, Union Bank boosted its net profit by 24 percent to P5.35 billion as higher net interest earnings were complemented by trading gains, in turn aided by a historically low interest rate environment.

This year’s performance, Valdepeñas said, would all depend on what would happen in the second half of the year given uncertainties arising from the sluggish US economy, a lingering debt crisis in Europe and concerns over rising inflation in China.