Despite the dip in profit, total revenues rose 8.4 percent to P19.4 billion, fueled by the bank’s expanding consumer lending business, wider margins, and higher fee income.
Management’s view
“The underlying drivers of our financial performance remain solid. We continue to see substantial new client acquisitions month-on-month as well as expansion of our net interest margin and fee-based income,” said Manuel R. Lozano, UnionBank chief financial officer.
“These indicate that the strong revenue trend will be sustained. Moreover, if we normalize for the impact of one-offs, our net income would be comparable to prior quarters. Moving forward, we expect performance to get back to this trajectory and we remain confident that we will exceed our 2024 performance,” he added.
Consumer boost
Consumer loans now account for 62 percent of the total loan portfolio, nearly three times the industry average, as credit cards, personal loans, and teachers’ loans continued to grow rapidly.
The bank’s net interest margin improved by 69 basis points to 6.3 percent, benefiting from a shift to higher-yielding loans and lower funding costs.
Fee-based income also jumped 21.3 percent to P3.7 billion, supported by the steady expansion of UnionBank’s retail base, which now stands at 17.6 million customers.
Write-off
The lower earnings reflect tax-related write-offs and non-recurring costs tied to a subsidiary, which management expects to fade out in the coming quarters.
With strong growth in consumer banking and healthy margins, UnionBank is positioning itself for a stronger rebound over the rest of the year.
