UnionBank books lower net profit

Advertisement
Font Size

UnionBank in Ayala, Makati  Philippines — BW FILE PHOTO

UNIONBANK of the Philippines, Inc. booked lower net earnings in the first semester as it continued to build up loan provisions amid the coronavirus disease 2019 (COVID-19) pandemic.

The Aboitiz-led lender’s net income slipped six percent year on year to P4.5 billion in the first six months of the year, it said in a stock exchange filing on Monday.

Provisions for loan losses in the first half totaled P7 billion, the bank said.

“The bank deemed it prudent to add reserves ahead of the potential impact of the COVID-19 crisis on its credit portfolio,” UnionBank said in its filing with the bourse.

UnionBank’s return on equity stood at 9.2% as of June against the 11.1% recorded last year.

The bank’s revenues surged 55% to P22.1 billion in the first semester, backed by growth in its net interest income and higher trading gains.

The lender’s net interest income reached P13.8 billion, climbing 41% from a year ago, supported by higher earning assets and margin improvement. Other income also jumped 86% to P8.3 billion backed by its trading gains.

Loan growth in the first half was supported by expansion in segments like consumer (33%), small- and medium-sized enterprises (22%) and commercial lending (33%).

Meanwhile, UnionBank’s margins increased 94 basis points to 4.5% on the back of lower funding costs due to the 21% growth in its current account, savings account or CASA deposits and lower market interest rates.

Deposits with the bank also rose 19% to P510.4 billion in the first half. Meanwhile, total assets increased seven percent to P751.5 billion as of June.

UnionBank’s shares closed unchanged at P52 apiece on Monday. — LWTN





Advertisement