Aboitiz-led Union Bank of the Philippines saw earnings surge in the second quarter on healthy revenue growth and a sharp drop in expenses.
“We continue to post strong topline revenues. Now that we have completed the integration of the acquired Citi consumer business, the parent bank’s expenses have naturally declined,” UnionBank chief financial officer Manuel Lozano said in a stock exchange filing on Monday.
“As a result, our net income in the second quarter of the year is at ₱3.1 billion, which is up by more than 50 percent from the ₱2.0 billion booked in the previous quarter,” he added.
First half drag
Earnings in the first half, however, slumped over 20 percent to ₱5.1 billion. The figure includes non-recurring integration expenses related to the Citi takeover that were booked early in the year.
Revenues during the first half period reached ₱37.3 billion, an 8.3 percent increase from last year.
Booming consumer sales
This growth is driven by the bank’s expanding consumer business, higher net interest margin, and increased transaction fees.
Net interest income rose by 14.8 percent to ₱27.5 billion, with the bank’s net interest margin at 5.7 percent, one of the highest in the industry, while consumer loans now make up 59 percent of UnionBank’s total loan portfolio, nearly three times higher than the industry average.
Operating expenses improved by 2.4 percent year-on-year to ₱21.6 billion. IT expenses alone declined by almost P1 billion after integrating Citi’s consumer business.
The bank now boasts over 15 million customers, with total assets at ₱1.1 trillion and low-cost deposits at ₱427.8 billion.
Miguel R. Camus has been a reporter covering various domestic business topics since 2009.
