UnionBank’s net earnings down to P6.1B

UNION Bank of the Philippines’ (UnionBank) net profit decreased by 4.6 percent to P6.1 billion in the first nine months of 2018 from P6.4 billion in the same period last year.

In a statement on Monday, UnionBank Treasurer and Chief Finance Officer Jose Emmanuel Hilado blamed the drop on the “rise in interest rates and the absence of new loan releases to teachers have affected our margins.”

Monetary authorities have raised key interest rates by a total of 150 basis points beginning in May.

The bank’s net revenues grew by 3.3 percent to P18.9 billion from year-ago’s P18.3 billion.

Its earnings performance translated to an annualized return on equity and return on average assets of 11.0 percent and 1.3 percent, respectively.

The lender said it sustained doubledigit growth on its customer businesses, while total loans grew by 18.6 percent year-on-year to P315.3 billion, with retail loans accounting for 33 percent of total loan portfolio.

“This boosted the bank’s total assets to grow by 17.0 percent year-on-year to reach P643.0 billion from P594.4 billion in the same period a year ago,” it added.

Assets were mainly supported by deposits at P441.4 billion.

According to Hilado, UnionBank expects its margins to improve as assets reprice and after its subsidiary City Savings’ access to the Department of Education’s automatic payroll deduction system has been resolved.

“We remain confident in sustaining our robust earning asset growth, which shall be supported by our successful P10-billion rights offering,” he said.

UnionBank’s shares rose by P1.15 to end at P66.95 each on Monday, in line with the 0.63-percent rise in the Philippine Stock Exchange index.