UNIONBANK OF THE Philippines, Inc. saw its earnings climb in 2019. — TL-PH.FACEBOOK.COM/UNIONBANKPH

UNIONBANK OF THE Philippines, Inc. saw its net earnings nearly double in 2019 on the back of a higher loan portfolio, margin recovery and strong gains from trading activities.

In statement on Monday, UnionBank said it booked a record high net profit of P14 billion last year, almost double the P7.3 billion it posted in 2018. This translated to a return of equity on 16.3% and return on assets of two percent.

“UnionBank ended 2019 on a high note. Our performance was supported by solid fundamentals given a healthy loan portfolio and steady margin recovery. Trading gains also boosted the bank’s bottom line. Moreover, CitySavings delivered their targets for the year given successes in the salary loans and motorcycle business,” UnionBank Treasurer and CFO Jose Emmanuel U. Hilado was quoted as saying in the statement.

The lender said it also saw its revenues jump by 44% last year.

Its customer loans rose 21% year on year to P393.4 billion in 2019 on the back of sustained double-digit growth in small and medium enterprises, credit cards, consumer loans and commercial lending, which went up by 40%, 35%, 31% and 16% year on year, respectively.

Its margins likewise rose by 113 basis points from the bank’s bottom level at the start of 2019, “driven by asset repricing efforts, placement of funds in cost-efficient instruments, and the impact of cuts in policy rate and reserve requirement ratio during the year.”

UnionBank President and CEO Edwin R. Bautista said the bank’s digital initiatives also contributed to its growth as the bank continues to expand its business.

“I am glad of the strong growth we achieved and the superior returns we delivered amid integration of new subsidiaries and continued investments in digital transformation. Our digital strategy was key as we scaled up our businesses while maintaining lean operations,” Mr. Bautista said.

UnionBank’s total assets also rose 15% year on year to P770.9 billion at end-2019.

Last week, Moody’s Investors Service has affirmed its credit rating of Baa2 and maintained a stable outlook for the bank on the back of its strong capital and liquidity position. This is in line with Moody’s credit rating on the Philippines.

Moody’s also maintained the bank’s foreign currency senior unsecured rating of Baa2 and foreign currency senior unsecured medium-term note program rating of (P)Baa2.

Meanwhile, its baseline credit assessment (BCA) for the bank is at baa3 which reflects the bank’s “robust capitalization and large pool of liquid assets.”

Moody’s said a rating upgrade for the bank’s long-term ratings is “unlikely,” given the country’s stable sovereign rating, but it “could upgrade the bank’s BCA because of a sustained improvement in the bank’s asset quality or capitalization. A lower dependence on the bank’s confidence-sensitive time deposits for funding will also exert upward pressure on the bank’s BCA.”

UnionBank’s shares closed at P60.90 apiece on Monday, up by P1.10 or by 1.84%. — B.M. Laforga