AUB Group’s consolidated profit surges 50% in the first semester

ASIA United Bank Corp. (AUB) and its subsidiaries saw its consolidated net income surge in the first semester amid a higher total operating income and lower loan loss provisions.

AUB Group’s consolidated net profit was at P2.9 billion in the first half of the year, rising by 50% from the P1.9 billion seen a year prior, the listed bank said in a disclosure to the stock exchange on Monday.

This translated to a return on assets of 1.8%, up from 1.2%, and a return on equity of 15.8%, improving from 11% last year.

“We remain on track with our target to return to our pre-pandemic net income performance of P4.4 billion, especially as the economy gradually reopens,” AUB President Manuel A. Gomez was quoted as saying.

“We are pleased to note that these profitability ratios are among the highest, if not the best, in the industry, as far as published reports of other publicly listed banks go,” Mr. Gomez said.

The group’s total operating income went up by 12% to P6.9 billion in the first semester from P6.1 billion a year prior on the back of higher net interest earnings and other operating income.

Net interest income climbed by 8% to P5.8 billion from P5.4 billion amid an increase in interest earnings and lower interest expense.

“Interest income from loans and receivables remained flattish at P5 billion while interest income from trading and investment securities grew 56%, year on year,” AUB said in the statement.

The bank saw an increase in its low-cost current account, savings account (CASA) deposits, which reached P222 billion as of June. Its CASA-to-total deposits ratio was at 84%, up from 71% a year prior.

“Coupled with the retirement of high-cost deposits, this drove down the group’s interest expense by 20% to P742 million from P922 million during the first half of 2021,” the lender said.

Meanwhile, the group’s non-interest income increased by 42% to P1.1 billion from P743 million, which the bank, in its statement, attributed to better trading and foreign exchange gains and higher transaction fee income.

Operating expenses were flat at P2.7 billion in the first semester, resulting in a cost-to-income ratio of 40%, down from 45% a year ago.

AUB Group set aside provisions for credit and impairment losses worth P511 million in the period, 43% lower than the P897 million seen a year prior.

This, as its asset quality improved, with its nonperforming loan ratio declining year on year to 1.8% as of June from 2%.

AUB’s total assets were at P319.7 billion at end-June, which it said ranked it among the country’s 20 biggest banks.

The bank’s shares lost 40 centavos or 0.89% to end at P44.45 each on Monday. — BVR