AUB posts 126% increase in profit

Asia United Bank grew its first-quarter profit by 126 percent year on year to P383 million on the back of hefty securities trading gains.

The 15-year-old commercial bank, which recently finalized a deal to take over Asiatrust Development Bank, booked trading gains of P444 million, about 17 times the level in the same period last year. Given the large earnings from proprietary trading during the period, the bank set aside an additional P86 million for loan loss provisions.

While many consider trading income as “one-off” gains that may not be sustainable in the long haul due to the unpredictability of the financial markets, AUB said diversifying its treasury portfolio was part of a holistic and long-term strategy to aggressively build its financial muscle. This, it said, was supported by the strengthening core businesses and expansion of the bank’s nationwide presence.

“While we pretty much have the same story as most banks when it comes to robust first-quarter results, what made ours different is that we have managed to sustain trading gains since we started diversifying into emerging markets in 2003,” said Antonio Agcaoili, AUB executive vice president and head of treasury.

Trading incomes also come in handy for a bank that continues to be on an acquisition mode.

In a span of three years, AUB bought Rural Bank of Angeles, boosting its presence outside Metro Manila; the Cooperative Bank of Cavite, which is awaiting approval of the Bangko Sentral ng Pilipinas; and Asiatrust Bank, which will expand AUB’s branch network to 102.

AUB, which is led by the Rebisco group, had total assets of P50 billion and capitalization of P10 billion as of end-March this year.—Doris C. Dumlao