UnionBank Q2 profit up 91.6%; full-year goal within sight
Aboitiz-led Union Bank of the Philippines grew its second quarter net profit by 91.6 percent year-on-year to P3.57 billion on steady interest earnings and lower loan loss provisioning expense as asset quality improved.
This brought the bank’s six-month net profit to P8.3 billion, 94-percent higher than the same period last year. This translated to a return on equity of 15.9 percent.
“Our strong first half performance and good trajectory gives us confidence that we will hit our full-year targets. Our NPLs (nonperforming loans) are on a declining trend driven by proactive efforts to manage credit risk,” Jose Emmanuel Hilado, UnionBank chief financial officer and treasurer said in a disclosure on Monday.
Net interest margins improved while funding costs declined as low-cost deposits sustained a record year-on-year growth of 28 percent to P299.6 billion.
Compared to the first quarter when trading gains were larger, net profit declined by about 24.5 percent, Hilado said. Net interest earnings in the second quarter, however, stood 8-percent better than the previous quarter’s level.
For the six-month period, the bank’s net revenues increased by 16 percent year-on-year to P25.5 billion.
However, UnionBank reported a 4-percent year-on-year decline in its loan book to P336.9 billion, citing muted corporate and commercial credit demand.
The bank booked P3.1 billion in loan loss buffer during the period, 56-percent lower than the previous year.
As of end-June, total assets stood at P733.6 billion compared to P751.5 billion a year ago.
