Union Bank net profit up 17% to P6.3B in 9 months
Aboitiz-led Union Bank of the Philippines grew its January-to-September net profit by 16.8 percent to P6.31 billion year-on-year on higher interest earnings and trading gains early in the year.
For the third quarter alone, business slowed down, resulting in an 11.4-percent year-on-year drop in net profit to P2.25 billion. This was largely due to the slack in trading gains during the period.
“We’re moving on track, not just with financial results but also with non-financial results,” said Union Bank president Victor Valdepeñas, citing the bank’s moves to optimize branch network and manpower.
Union Bank’s nine-month net interest income grew by 4.6 percent to P5.45 billion from a year ago. On the other hand, net trading gains jumped 18.65 percent to P5.28 billion year-on-year.
The bank had loans and receivables of about P90.94 billion against a deposit base of P155.86 billion as of end-September, indicating a loan-to-deposit ratio of 58.4 percent.
Net loan book expanded by close to 20 percent, led by the consumer business, which expanded by almost 40 percent.
“Consumer loans have been very strong. Auto and mortgage loans combined are growing closer to slightly over 30 percent,” Valdepeñas said in an interview.
On the other hand, he said the credit card business was “flattish because we’ve become very selective in the granting of credit cards. We’re catering to people who can really afford to pay. So there’s less growth but bottomline is better.”
The banker estimated that the bank’s revenue-to-expense ratio—a key indicator of efficiency—stood at about 2.55:1, which meant that for every peso spent, it was generating P2.55 in gross revenues.
For the third quarter, Union Bank’s net interest income dipped by 2.2 percent to P1.78 billion while net trading gains fell by 12.3 percent year-on-year to P1.99 billion.
For the full year, Union Bank is expecting net profit to grow by 10-15 percent but “this will all depend on how financial markets fare in the fourth quarter,” Valdepeñas said.
