Asia United Bank’s nine-month net earnings up 9%

ASIA UNITED BANK Corp.’s (AUB) net profit rose by 9% year on year in the first nine months, backed by higher revenues.

AUB booked a net income of P9.4 billion in the nine months ended September, climbing from P8.6 billion in the same period a year ago, it said in a disclosure to the stock exchange on Thursday. This translated to a return on assets of 3.2% and a return on equity of 20.4%.

Its financial statement was unavailable as of press time.

“Sustaining our profitability is no mean feat, considering the heightened risks in our operating environment, both domestically and globally. But we managed to post double-digit growth rates in our core businesses,” AUB President Manuel A. Gomez said.

“We remain on the lookout for growth opportunities on the horizon, particularly in digital partnerships. It is through this that we can offer digital payment solutions such as our all-in-one digital payment acceptance product AUB PayMate, as well as revolutionize cross-border digital payments through our HelloMoney e-wallet, among others.”

The bank’s operating income rose by 10% to P17.2 billion in the period from P15.6 billion the previous year.

“Earning assets [grew] 22% to P390.6 billion from P319.2 billion, resulting in an 8% increase in net interest margin to P13.5 billion and a net interest margin ratio of 5% during the period,” it said.

AUB’s non-interest income jumped by 18% year on year to P3.7 billion, supported by trading and foreign exchange gains and higher fee-based revenues from credit cards,

AUB PayMate, HelloMoney and remittance transactions, trust operations, and other branch-related services.

Meanwhile, its operating expenses grew by 10% to P5.5 billion due to higher compensation, capital expenditures, and growth-related costs.

This resulted in a cost-to-income ratio of 32.2%, AUB said.

The bank’s loan book expanded by 29% year on year to P256.9 billion at end-September from P198.9 billion.

Despite this growth, its nonperforming loan (NPL) ratio improved to 0.36% at end-September from 0.53% a year ago.

“AUB set aside loan loss provisions 141% higher than the previous year to support its expanding loan portfolio… It also remains sufficiently covered, with an NPL coverage ratio at 117.14%.”

On the funding side, total deposits went up by 19% to P336.2 billion, 78% of which were low-cost current account, savings account deposits, up from the 76% ratio seen a year ago.

AUB’s total assets stood at P417.1 billion as of September, growing by 19% from the year-ago level.

Total equity was at P65.7 billion, up 16% from P56.6 billion in the same period last year, backed by its retained earnings.

“The bank is adequately capitalized with capital ratios well above regulatory requirements. It has an indicative common equity Tier 1 ratio of 18.75% and a capital adequacy ratio of 19.5%,” it said..

AUB shares dropped by 75 centavos or 1.98% to close at P37.10 apiece on Thursday. — A.M.C. Sy