UNIONBANK of the Philippines, Inc. recorded a higher net profit in the first nine months of the year as earnings from its core businesses improved and as its loan loss provisions declined.
The Aboitiz-led lender’s net profit increased 26% year on year to P10.71 billion in the first nine months of 2021, based on its filing with the local bourse on Tuesday. Its previous financial report showed its net income in the same period of 2020 stood at P8.482 billion.
This translated to a return on equity of 13.6% as of end-September.
The bank’s net interest income in the January to September period went up by 3% year on year to P22 billion on improved margins. Its net interest margin rose to 4.6% from 4.5% a year earlier.
“Lower funding costs coming from the robust growth of our CASA (current account, savings account) deposits supported our margin growth,” the bank said in a statement.
Interest expense stood at P4.763 billion as of September, down 41% from the P8.082 billion a year earlier.
Meanwhile, the lender’s non-interest income climbed 22% to P12.6 billion in the first nine months, backed by better trading gains, foreign exchange income, as well as fees and commissions.
UnionBank’s loans declined 4% year on year to P341.5 billion at end-September amid muted demand for corporate credit.
The bank’s nonperforming loan ratio was at 4.9% as of September, improving from the 5.1% posted at end-2020.
Its provisions for credit losses decreased by 45% to P4.122 billion in the period from P7.458 billion a year ago.
On the funding side, deposit liabilities stood at P517.371 billion as of September. CASA deposits grew by 26% year on year to P318.3 billion.
The bank’s assets stood at P767.76 billion in the same period, inching up by 1.28% from P758.02 billion a year earlier.
DIGITAL INITIATIVES
UnionBank said its registered users reached 3.6 million at end-September amid its digital onboarding initiatives. This was 2.4 times higher from a year earlier.
The lender added that they onboarded 180,000 micro-, small- and medium-sized enterprises and channel partners across their platforms in the same period, increasing by 46% from a year earlier.
In July, UnionBank secured a digital bank license from the Bangko Sentral ng Pilipinas. It is set to launch Union Digital Bank by 2022.
UnionBank President and Chief Executive Officer Edwin R. Bautista expressed optimism for the bank’s performance as the economic situation improves.
“With our current momentum and the reopening of the economy, we are confident that the worst of the pandemic is behind us. We will be entering 2022 with a solid base from where we can resume our pre-pandemic growth trajectories,” Mr. Bautista was quoted as saying.
UnionBank shares closed at P90.60 apiece on Tuesday, up by five centavos or 0.06% from its previous finish. — L.W.T. Noble