ASIA UNITED Bank Corp. (AUB) saw its consolidated net income rise by 32% year on year to P2.1 billion in the second quarter as its net interest and non-interest earnings increased.

This brought the AUB Group’s consolidated net profit for the first half to P4.1 billion, up by 42% year on year, the bank said in a disclosure to the local bourse on Tuesday.

The bank’s financial statement was not available as of press time.

AUB’s first-semester performance translated to a return on equity of 20.3%, while return on assets was at 2.6%.

The bank’s total operating income rose by 26% to P4.4 billion in the second quarter alone amid an increase in both net interest and non-interest earnings.

For the first half, its total operating income went up by 30% year on year to P8.9 billion.

“This was on the back of a 28% increase in net interest income to P7.4 billion attributable to business volume growth and increased yields. Non-interest income rose 41% to P1.5 billion,” AUB said.

Meanwhile, operating expenses climbed by 13% to P3.1 billion in the first semester due to compensation increases and transaction volume-related expenses.

This brought AUB’s cost-to-income ratio to 34.8%, down from 40% in the same period the prior year.

Loans grew by 9% to P190.5 billion amid the expansion of its corporate and consumer portfolios “as confidence in the economy further improved in the first half.”

Its net interest margin rose to 5% from 3.8%.

“Strong contributions to the increases in service charges, fees and commissions, securities trading gains and foreign exchange gains came from AUB’s operating activities such as remittance, credit cards, trust, AUB PayMate, and trading businesses,” the bank said.

Even with the increase in loan volume, AUB’s nonperforming loan (NPL) ratio stood at just 0.85%, with its NPL coverage ratio rising to 114.8% as of June from 79.8% a year ago.

The bank set aside provisions amounting to P952 million in the first half, up from P510 million in the same period last year.

On the funding side, total deposits stood at P269.9 billion, with low-cost current and savings account deposits making up 72.5% of the total.

Loan-to-deposit ratio stood at 70.57%.

AUB’s assets stood at P327.7 billion at end-June.

“Total equity was at P43.8 billion, with an indicative common equity Tier 1 ratio of 15.42% and a capital adequacy ratio of 16%, both well above regulatory requirements,” the bank said.

“While we see continuous improvement in consumer and business confidence, we remain on the lookout for potential headwinds as monetary policy remains hawkish. However, we see plenty of opportunities in greater collaboration within and outside the organization, particularly in digital transformation, and this gives us confidence in sustaining our gains,” AUB President Manuel A. Gomez was quoted as saying.

AUB’s shares closed at P47.30 apiece on Tuesday, up by 25 centavos or 0.53%. — A.M.C. Sy