Union Bank profit up 8% in 1st half
Aboitiz-led Union Bank of the Philippines grew its first semester net profit by 8 percent year-on-year to P4.7 billion as higher interest earnings made up for the slack in securities trading and fee-based businesses.
“We are ahead of our target for the year despite margin compression in the first half due to higher interest rates and regulatory compliance. For the remainder of the year, we expect recurring income to drive profitability. We anticipate margins to improve as loan rates start to catch up against deposit cost,” Jose Emmanuel Hilado, UnionBank treasurer and chief financial officer, said in a statement on Monday.
For the second quarter alone, the bank’s net profit declined by 17 percent year-on-year to P1.78 billion due to trading losses alongside a decline in fee-based income.
For the six-month period, net revenues grew by 9.1 percent year-on-year to P12.7 billion. Net interest income rose 3.5 percent year-on-year to P8.35 billion given a double-digit growth in customer businesses.
The bank grew its loan book by 18 percent to P313 billion as of end-June, with retail loans accounting for 33 percent of total loan portfolio. This increase in earning assets boosted total resources by 12.8 percent to P623.2 billion.
Assets were mainly supported by deposits, which ended June at P452.9 billion compared to P447 billion in the same period last year.
Operating expenses for the six-month period rose by 16 percent year-on-year to P7.2 billion due to higher overhead expenses, taxes and licenses.
The bank’s six-month performance translated to an annualized return on equity and return on average assets of 12.8 percent and 1.6 percent, respectively. —DORIS DUMLAO-ABADILLA
