UnionBank net income down in H1

The earnings of Aboitiz-led Union Bank of the Philippines fell by 27 percent to P6.06 billion in the first half from P8.31 billion due to extraordinary trading gains recorded in the same period last year.

Jose Emmanuel Hilado, treasurer and global market head at UnionBank, said the first half performance highlights the strength of the listed bank’s core businesses and validates its retail-focused strategy.

“We have also accomplished major milestones geared toward achieving our aspirations of becoming the country’s best retail bank,” Hilado said.

Union Digital Bank started commercial operations, allowing the bank to offer financial services to the underserved consumer segment and has taken over the consumer banking business of Citi in the Philippines.

For the second quarter alone, the net income of the Aboitiz-led bank slipped by 2.5 percent to P3.5 billion from P3.59 billion in the same quarter last year, but was 32 percent higher than the P2.6 billion recorded in the first quarter.

Net revenues, excluding trading income, are up by 26 percent year-on-year and 10 percent quarter-on-quarter.

UnionBank was able to sustain its net interest margin at 4.7 percent due to growth in higher yielding consumer and commercial loans, coupled with record current account and savings account (CASA) growth.

Recurring fees jumped by 92 percent to P2.2 billion, driven by digital transactions.

As of end-June, the total assets of UnionBank stood at P875 billion, 19 percent higher than the same period last year.

The bank’s total loans and receivables grew by 13 percent to P381 billion, while total deposits increased by 12 percent to P555 billion.

“It was a strong quarter for the bank. Our net revenues were driven by recurring net interest income and fees. Credit costs have also stabilized and operating expenses are well within plan,” Hilado said.

For the rest of the year, Hilado said the bank would focus on protecting margins as it navigates the impact of rising interest rates on its balance sheet.

The Bangko Sentral ng Pilipinas (BSP) has so far raised interest rates by 125 basis points, bringing the benchmark rate to 3.25 percent, to curb rising inflationary pressures.