UNION BANK of the Philippines, Inc. expects its loan portfolio growth to accelerate further in the third quarter after it resolved issues on credit for teachers.
On the sidelines of Philippine Investment Summit in Taguig City, UnionBank President and Chief Executive Officer Edwin R. Bautista said the Aboitiz-led bank expects its loan growth to pick up this quarter.
“Our loans are still growing by 15-16%. It will accelerate in the third quarter because now we are able to book teachers loans, which was a big portion of our consumer loans,” Mr. Bautista told reporters on Wednesday.
Mr. Bautista explained that the lender was unable to issue loans for teachers for six months due to processing issues with the Department of Education (DepEd).
“Most of us who lend to teachers were hit by the delay in the DepEd processing. So for six months, we were not in effect granting loans,” Mr. Bautista said. “That’s been addressed now. It’s now flowing, our [net interest margin] will come back.”
Despite logging a lower net income in the second quarter, Mr. Bautista is confident that the bank’s full-year result will be better than the 2017 level.
“We don’t give profit guidance, but let me assure it will be higher than last year,” he said. “Actually, our income year-to-date is higher than our budget because of the way we design our budget.”
In the second quarter, UnionBank saw its net income decline 17.2% to P1.78 billion from P2.15 billion in the same period last year.
The bank’s other income came in at P1.6 billion, down 13% from a year earlier as service charges, fees and commissions fell 27.5% year-on-year to P818.85 million.
Still, UnionBank’s net profit in the six months to June was up 8% from a year ago at P4.72 billion.
Its shares closed at P84 apiece on Wednesday, up 10 centavos or 0.12%. — Karl Angelo N. Vidal