UnionBank Q1 income up
UNIONBANK of the Philippines (UnionBank) saw its net income surge in the first quarter of the year as it sustained double-digit growth in its businesses.
In a disclosure, UnionBank said its net profit grew 31.8% to P2.9 billion in the January-March period from the P2.2 billion it booked in the same period in 2017.
Its net revenue also climbed 21.5% to P6.9 billion.
The Aboitiz-led lender told the Philippine Stock Exchange that it continues to “sustain double-digit growth in terms of customer businesses.”
The bank’s total loans rose by 15.9% year-on-year to P293.1 billion in the first quarter as its consumer business accounted for 34% of the bank’s loan book.
Deposits, on the other hand, were at P439.6 billion, current accounts and savings accounts making up more than one-third of UnionBank’s total deposits.
Overall, UnionBank’s total assets grew to P608.4 billion as of end-March, up 17.3% from the figure logged in the comparable year-ago period.
The bank’s asset growth was also supported by the medium-term note program conducted in November last year, through which it raised $500 million.
“The strong earnings resulted to an annualized return on equity and return on average assets of 15.9% and 2.0%, respectively,” the bank added in the disclosure.
“Given our positive earnings performance in the first quarter, we are confident that we can attain our full-year target,” said UnionBank Treasurer and Chief Financial Officer Jose Emmanuel U. Hilado. “We expect earnings in the succeeding quarters to once again come from recurring income as we continue to grow our balance sheet.”
“Our solid profitability results are quite timely as it allows us to fast-track our investments in digital transformation,” UnionBank President and Chief Executive Officer Edwin R. Bautista was quoted as saying in the disclosure.
In an exposition held in Taguig City last Thursday, Mr. Bautista said the bank will embrace blockchain technology to help connect rural banks, as well as improve the efficiency of internal processes.
UnionBank also announced it will raise P10 billion in additional capital through a stock rights offer (SRO) as approved by its board of directors.
“The additional capital will increase the common equity tier 1 and total capital adequacy ratio of the bank,” it said in the disclosure, adding that the proceeds will be used to allow for continued growth of its assets.
Banks have been conducting fundraising activities to bolster their capital and finance their growth and operations.
Earlier this month, Metropolitan Bank & Trust Co. completed its rights offer, raising P60 billion to fund its business operations and expansion.
The SRO of Bank of the Philippine Islands, on the other hand, also wrapped up last week. The Ayala-led bank’s capital-raising activity is also expected to raise P60 billion.
UnionBank shares closed at P91.25 each on Monday, gaining P1.05 or 1.16% from Friday’s finish.