Union Bank of the Philippines, the country’s ninth-largest lender in terms of assets and controlled by the Aboitiz Group, is optimistic of sustaining this year the double-digit growth in net income posted in the first quarter this year.
UnionBank president Edwin Bautista said at the sidelines of the annual stockholders’ meeting in Pasig City on Friday the recent move of the Bangko Sentral ng Pilipinas to cut again the reserve requirement to 18 percent from 19 percent on Thursday was a positive thing.
“I think the growth in the first quarter (of 33 percent in net income) could be sustained this year,” Bautista said.
“I think the economy is robust and the banks can grow out of it,” Bautista said.
UnionBank earlier announced a plan to raise an additional capital of P10 billion through a stock rights offering. Union Bank officials said a one-tranche SRO would be conducted in July 2018.
Net income jumped 33 percent to P2.9 billion in the first quarter from P2.2 billion a year ago, backed by sustained growth in its core businesses. Net revenue rose 21.5 percent to P6.9 billion.
The strong earnings resulted in an annualized return on equity and return on assets of 15.9 percent and 2.0 percent, respectively.
The bank sustained double-digit growth in terms of customer businesses. Total loans rose 15.9 percent to P293.1 billion year-on-year, with consumer loans accounting for 34 percent of the total loan portfolio.
Total assets climbed 17.3 percent year-on-year to P608.4 billion. Deposits reached P439.6 billion with CASA accounting for more than one-third of total deposits.
Asset growth was also supported by the successful $500-million medium term notes issuance in November last year.
“Given our positive earnings performance in the first quarter, we are confident that we can attain our full-year target. We recognized gains from our investment portfolio following the adoption of the new PFRS 9 accounting standards,” UnionBank treasurer and chief financial officer Jose Emmanuel Hilado said in a statement.
“We expect earnings in the succeeding quarters to once again come from recurring income as we continue to grow our balance sheet,” he said.