Asia United Bank sets plan to upgrade to universal banking in 2 years
MANILA, Philippines—Medium-sized commercial bank Asia United Bank plans to upgrade to universal banking and go public in the next two years as part of its plan to grow into a more significant banking player.
In a press briefing on Tuesday, top AUB officials reported that the bank had grown its nine-month net profit by 47.55 percent year on year to P1.04 billion, on track with its full-year bottom-line target of P1.6 billion.
AUB president Abraham Co said in the last 15 years since the bank was founded, it has been “trying to be a bank that’s not under the shadow of the other bigger banks.” He said the aspiration has always been to “create a difference in the banking community.”
“We need to grow at this point to be of relevance and we already have the base, the system and the people to properly expand,” he said.
Co said upgrading to universal banking license might happen in 2013 while a stock market listing might be in the horizon within the next two years.
A unibank license will give the bank the authority to expand its businesses to non-allied undertakings and also require a minimum public ownership of 10 percent.
Co said AUB, in upgrading to unibanking, would want to go into industrial ventures, especially if the Philippine manufacturing sector became a more significant contributor to the domestic economy. “I think, we’re getting there,” he said.
In the last three years, AUB has also grown through acquisition. It bought the Rural Bank of Angeles, boosting its presence outside Metro Manila; Asiatrust Development Bank; and the Cooperative Bank of Cavite, which will be renamed Cavite United Rural Bank, upon approval by the Bangko Sentral ng Pilipinas.
“We have 108 branches as of today. We’ll probably hit 115 by yearend and hopefully, we’ll have more than 150 in two years’ time,” Co said.
In the first nine months, AUB’s earnings were boosted by P1.05 billion in income from securities trading, three times higher than the level in 2011. AUB executive vice president and head of treasury Antonio Agcaoili Jr. said this was part of the medium-sized commercial bank’s strategy to aggressively build up its war chest to fund more acquisitions and widen its footprint nationwide.
Net interest income was flat at P1.35 billion versus a year ago. The bank expanded its loan book by over 40 percent year on year but margins are declining across the banking industry.
Over the next few years, Co said part of the strategy would be to expand AUB’s consumer lending business.
In the first nine months, the bank’s total assets rose by 37 percent year on year to P62 billion. Return-on-equity ratio also rose to 14 percent from 13.8 percent in the same period last year, ranking it among the most profitable commercial banks in the country.
“As we celebrate 15 years of innovation in Philippine banking, expect AUB to become a stronger and more formidable banking industry player in the coming years,” Co said.
AUB is owned by a diverse group of Asian investors engaged in property development, manufacturing and other equity ventures. Republic Biscuit Corp. (Rebisco), the Philippines’ leading manufacturer, distributor and exporter of snack food products for the past 49 years, is the biggest shareholder of the bank.
