Unionbank starts year strong, Q1 profit surged 79% to P4.7B
Aboitiz-led UnionBank of the Philippines (UBP) grew its first quarter net profit by 79 percent year-on-year to P4.7 billion on the back of higher interest earnings and hefty trading gains.
This performance translated to a robust return on equity of 18.1 percent, the bank told the Philippine Stock Exchange on Friday.
“Our strong financial performance in the first quarter puts us on track to achieve our 2021 targets. We’re also starting the year with strong capital ratios, better margins and improving credit risk,” said UnionBank chief financial officer Jose Emmanuel Hilado.
Net revenues went up by 50 percent year-on-year to P14.3 billion.
Net interest income increased by 6 percent to P7.2 billion despite muted credit demand, as the bank expanded its source of low-cost funding. Low-cost deposits grew by 29 percent year-on-year while high-cost deposits went down by 22 percent. Total loans and receivables went down by 12 percent to P344.9 billion, attributed to the weak demand for corporate loans.
On the other hand, noninterest income reached P7.1 billion, 2.6 times larger than the level last year, mainly driven by trading gains.
The higher net revenues provided cushion for the bank to book additional loan loss provisions of P2.3 billion even as bad loans declined to 4.7 percent as a ratio of total loans from 5.1 percent in December 2020.“I am pleased with the bank’s first quarter results despite continued challenges from the pandemic. We continue to see a big shift in the use of digital channels. The bank onboarded more than 470,000 new digital customers in the first quarter of 2021 alone,” said UnionBank president Edwin Bautista.
