UCPB posted 25% profit growth in ’11

United Coconut Planters Bank grew its net profit last year by 25 percent to P3.05 billion from a year ago on higher interest earnings, treasury gains and some asset sale.

This year, the bank aims to post a net of P4 billion, sustaining its financial turnaround for the fourth year.

“We are optimistic that we can sustain UCPB’s growth momentum given our associates’ commitment to building a bigger and stronger financial institution and our clients’ loyalty to the UCPB brand,” bank president Jeronimo Kilayko said in a statement.

UCPB aims to achieve its P4-billion net income target for this year by creating more technology-driven products while expanding its loan portfolio, remittance business, fee income and branch network.

The bank—which previously obtained liquidity infusion from the government—has been profitable since 2009.

Apart from a robust increase in its interest income due to growth in loan portfolio, higher treasury trading income and aggressive sale of idle property assets, UCPB attributed its strong performance in 2011 to efforts to trim cost of funds. Specifically, the bank phased out a costly “double-your-money” scheme and replaced it with long-term negotiable certificates of deposits.

The low-cost checking and savings accounts generated by its branches grew by 9.9 percent to P109.76 billion last year. Total deposits also increased by 7.4 percent to P161 billion, 68 percent of which consisted of checking and savings accounts.

UCPB also grew its earning assets by booking P57.5 billion in total loans last year, 73 percent of which came from the corporate segment. The biggest growth, however, came from the consumer loan segment which expanded by 34 percent to P15.5 billion from a year ago.

The bank’s non-interest income in 2011 went down by 13.6 percent to P1.9 billion which was attributed to the change in government policies on clearing and the lower foreign exchange gains due to a strong peso.

On the expense side, UCPB curbed its operating costs in 2011 by 13 percent to P4.7 billion from a year ago as the bank streamlined processes using automation initiatives.

With the opening of five more branches, UCPB’s total branch network is targeted to grow to 193 this year. With the growing demand for mobility and convenience, the bank has announced the upgrading of its phone banking service to include mobile banking.

UCPB said it was also tapping major property developers to make the bank’s consumer loans accessible to a bigger clientele and had been forging tie-ups with both Internet- and office-based remittance companies to boost its remittance operations.

The bank ended 2011 with a higher capital adequacy ratio of 11.92 percent compared to 10.60 percent a year ago and the 10 percent minimum level required by the Bangko Sentral ng Pilipinas.