UNIONBANK of the Philippines, Inc. saw its net income surge by 94% in the first semester, backed by higher earnings from its core businesses and lower provisions for credit losses.

The Aboitiz-led bank booked P8.315 billion in net earnings in the first half, it said in a disclosure to the stock exchange on Monday, up from the P4.503 billion it posted in the same period last year.

UnionBank’s net revenues in the first semester climbed by 16% to P25.5 billion from a year earlier.

The bank’s net interest income rose by 7% to P14.8 billion in the period, supported by the improvement of its net interest margin to 4.7% from 4.4% a year ago.

Non-interest income likewise jumped by 33% to P10.7 billion, bolstered by trading gains, higher foreign exchange income, and improved earnings from fees and commissions.

“Our strong first half performance and good trajectory gives us confidence that we will hit our full-year targets… Net interest margins continue to improve coming from strong CASA (current account, savings account) growth as a result of strong digital customer take-up. Other income sources also continue to provide uplift on revenues,” UnionBank Chief Financial Officer and Treasurer Jose Emmanuel U. Hilado said in a statement.

The lender’s CASA deposits climbed by 28% to P299.6 billion.

Meanwhile, UnionBank’s loans and receivables decreased by 4% to P336.9 billion in the first half due to muted demand for corporate and commercial credit.

Its loan loss provisions also dropped 56% to P3.1 billion from last year. The bank said it set aside lower reserves as nonperforming loans (NPL) “started to stabilize,” with its NPL ratio improving to 4.7% at end-June from 5.1% at end-2020.

“Our NPLs are on a declining trend driven by proactive efforts to manage credit risk,” Mr. Hilado said.

The bank’s assets stood at P733.6 billion as of June.

UnionBank President and Chief Executive Officer Edwin R. Bautista said the bank recorded its highest digital account openings in the second quarter, which brought its total registered digital users to 2.9 million.

Online transactions also went up by 2.4 times year-on-year to more than 7.2 million in June, he added.

“We continue to witness the market’s affirmation of our digital strategy,” Mr. Bautista said.

He added that UnionBank’s digital lender will be its “main vehicle to reach the unbanked and underserved market towards fulfilling [its] goal of inclusive prosperity.”

The Bangko Sentral ng Pilipinas last week granted UnionBank the country’s fourth digital bank license, which the lender said will be a separate unit called Union Digital Bank.

UnionBank’s shares closed at P76.50 apiece on Monday, up by 45 centavos or by 0.59% from its previous finish. — Luz Wendy T. Noble