ASIA UNITED Bank Corp. (AUB) registered a lower net profit in the third quarter due to a decline in its interest earnings and trading gains.

The lender’s net earnings dropped by 31% year on year to P998 million in the three months to September from P1.456 billion, based on its financial report released on Wednesday.

This brought its nine-month bottomline to P2.945 billion, down by 21.5% from the P3.752 billion seen in the same period of 2020.

With this, return on assets slipped to 1.3% at end-September from 1.8% a year earlier. Return on equity likewise dropped to 10.8% from 14.6%.

Net interest income in the third quarter inched up by 3.5% year on year to P2.83 billion from P2.733 billion. As of end-September, net interest margin was at 3.8%.

Interest income dipped by 3.5% to P3.268 billion from P3.387 billion. Meanwhile, interest expense declined by 33% to P439 million from P654 million.

On the other hand, AUB’s non-interest earnings dropped by 75% year on year to P428 million in the third quarter from P1.734 billion. This was mainly caused by the decline in its trading gains, which slumped by 97% to P38 million from P1.295 billion a year earlier.

This drop was partially offset by its fee income, which went up by 20% to P228 million year on year in the third quarter. Foreign exchange gains also rose by 48% to P86 million, while trust income improved by 26% to P29 million.

For the third quarter, the bank’s total operating income decreased by 27% to P3.257 billion from P4.467 billion a year earlier.

Meanwhile, the lender’s total operating expenses dropped by 37% to P1.878 billion in the quarter from P3 billion a year earlier.

AUB’s provisions for impairment losses declined by 65% year on year to P507 million from P1.447 billion. As of end-September, it has set aside P1.404 billion, down by 52.5% from the P2.957 billion logged a year earlier.

The bank’s loans and receivables stood at P165.364 billion as of end-September, slightly down from the P165.446 billion seen in the same period of 2020. Its nonperforming loan ratio improved to 1.92% from 2.2% a year earlier.

Its assets rose by 9% to P317.293 billion as of end-September from P290.841 billion last year.

On the funding side, deposit liabilities increased by 13% to P262.35 billion in the same period from P232 billion.

AUB’s capital adequacy ratio decreased to 16.59% as of end-September from 18.54% a year earlier. Meanwhile, its common equity Tier 1 ratio inched up to 15.95% from 15.17%.

The bank had 265 branches as of end-September.

AUB shares closed unchanged at P45 apiece on Wednesday. — L.W.T. Noble