UNIONBANK OF THE Philippines, Inc. booked a higher net profit in the first three months of the year amid better revenues and higher net interest income.
The bank’s net income grew 22% year on year to P2.641 billion, according to the lender’s filing with the local bourse on Monday.
Revenues also jumped 37% to P9.5 billion. This was bolstered by its net interest income which surged 47% to P6.8 billion.
The bank’s loan book increased 24% to P391.8 billion on the back of growth in commercial lending (35%), consumer loans (34%), SME (small and medium-sized enterprises) banking (25%) and its credit card business (15%).
The potential impact of the coronavirus disease 2019 (COVID-19) has also been factored in by UnionBank as it boosted its provisions for loan losses to P1.3 billion, 7.6 times higher than the P174.6 million it allotted in January to March 2019.
“We deemed it prudent to set aside higher provisions for the year given the uncertainties brought about by this unprecedented health crisis,” UnionBank Treasurer and Chief Financial OfficerJose Emmanuel U. Hilado said in a statement.
“Our solid financial performance and capital base shall provide us the cushion to withstand the economic impact of the enhanced community quarantine,” he added.
Meanwhile, the lender’s margins increased by 114 basis points to 4.5% from 3.4% in the previous year. This was boosted by lower funding costs due to the 22% growth in current account, savings account deposits, paired with the reduction in policy rates and reserve requirement ratio by the Bangko Sentral ng Pilipinas.
UnionBank’s total assets as of March stood at P751.855 billion.
“UnionBank is committed to support the economy and its customers by ensuring access to liquidity and other financial needs amid this crisis,” UnionBank President and Chief Executive Officer Edwin R. Bautista said in a statement.
In February, the bank raised P6.8 billion through its series A unsecured subordinated notes eligible as Tier 2 capital. With an interest rate of 5.25%, the papers will be callable in 5.25 years and will mature in 2030.
The Aboitiz-led lender’s shares finished trading at P54.40 apiece on Monday, up by 40 centavos or 0.74% from its previous close. — Luz Wendy T. Noble