Aboitiz-led Union Bank of the Philippines grew its first quarter net profit by 22 percent year-on-year to P2.6 billion, driven by a strong growth in earnings from lending activities.

This was even as the bank set aside a much bigger loan loss buffer in the first quarter amounting to P1.33 billion, 7.6 times higher than the provisioning expense of P174.64 million booked in the same period last year.

In a disclosure to the Philippine Stock Exchange, UnionBank said it had recognized higher provisions in anticipation of the potential impact of the COVID-19 pandemic on the bank’s credit portfolio.

“We deemed it prudent to set aside higher provisions for the year given the uncertainties brought about by this unprecedented health crisis. Our solid financial performance and capital base shall provide us the cushion to withstand the economic impact of the enhanced community quarantine,” said Jose Emmanuel Hilado, UnionBank treasurer and chief financial officer.

Union Bank’s total revenues went up by 37 percent year-on-year to P9.5 billion, driven by net interest income, which grew by 47 percent to P6.8 billion on higher loan volume and margins.

The bank grew its loan book in the first quarter by 24 percent year-on-year to P391.8 billion as the bank expanded commercial lending (+35 percent), consumer loans (+34 percent), small and medium enterprises (+25 percent), and credit cards business (+15 percent).

Net interest margins rose by 114 basis points to 4.5 percent from 3.4 percent in the previous year, driven by lower funding costs resulting from the 22-percent expansion of low-cost deposits as well as the Bangko Sentral ng Pilipinas’ cuts in policy rate and reserve requirement ratio.

“UnionBank is committed to support the economy and its customers by ensuring access to liquidity and other financial needs amid this crisis. Our branches remain open to the public and our digital channels are highly accessible. We encourage everyone to bank from home and take advantage of the features of our UnionBank Online app such as digital account opening, online check deposits, fund transfers, and remittance to partner outlets. I am deeply thankful to all UnionBank frontliners and employees operating the bank from home who ensure that we deliver full banking services to our customers during these trying times,” UnionBank president and chief executive officer Edwin Bautista said.

Read Next

EDITORS’ PICK

MOST READ

Don’t miss out on the latest news and information.

Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.

For feedback, complaints, or inquiries, contact us.

Source Article