AUB’s net income rises by 34% in Q1

ASIA United Bank Corp. (AUB) and its subsidiaries saw its consolidated net income rise by 34% year on year in the first quarter amid strong lending growth and its digital partnerships.

The AUB Group’s consolidated net earnings climbed to P3.1 billion in the first three months from P2.3 billion a year prior, the bank said in a disclosure to the stock exchange on Tuesday.

This translated to a return on equity of 22.3% and a return on assets of 3.4%, up from 20% and 2.8% a year prior, respectively.

The bank’s financial statement was unavailable as of press time.

“We have managed to sustain the growth in our profitability since the pandemic, thanks to our robust core business and digital partnerships,” AUB President Manuel A. Gomez said.

“While we are confident of our performance, we remain cautiously optimistic about the near-term outlook for the global economy due to the ongoing trade wars, the potential disruption in global supply chains, the projected slowdown in many major economies, and the growing geopolitical tension in some parts of the world. We will continue to adjust our sails to navigate this global turmoil and remain agile,” Mr. Gomez said.

AUB’s net interest income increased by 8% year on year to P4.3 billion in the first quarter. This came as its interest earnings rose by 9% to P5.6 billion, which partially offset the 11% increase in its interest expense on deposits.

The bank said its loan portfolio expanded by 34% to P252.6 billion from P188.4 billion a year ago, helping drive profitability. Despite the increase in loans, its nonperforming loan ratio improved to 0.35% from the previous year’s 0.47%.

Meanwhile, its total deposits rose by 9% year on year to P308.1 billion, with low-cost current account, savings account or CASA deposits accounting for 69% of the total and being its primary source of funding.

Net interest margin was at 5.1%.

“Non-interest income grew 81% to P1.3 billion as other non-interest-bearing business activities such as trading and securities gains, foreign exchange gains, miscellaneous income and service charges and other fees from other operating activities such as credit cards, AUB PayMate, HelloMoney, remittance business, trust and other branch-related transactions grew,” AUB added.

Meanwhile, the bank’s operating expenses increased by 9% year on year to P1.8 billion in the first quarter due to higher compensation, capital expenditures, and business growth-related expenses.

“Thanks to its heavy reliance on digital partnerships, the bank continues to exhibit efficient resource management in its business generation as evidenced by its 32.6% cost-to-income ratio,” it said.

Loan loss provisions went down by 15% to P66 million in the first quarter from P78 million  a year prior. Still, the bank’s NPL coverage ratio rose to 119.8% from 116.7%.

AUB’s assets increased by 11% year on year to P384 billion at end-March, while total equity rose by 22% to P61.8 billion.

Its indicative common equity Tier 1 ratio stood at 17.49%, while capital adequacy ratio was at 18.19%.

“The bank is adequately capitalized with capital ratios well above regulatory requirements,” it said.

AUB’s shares climbed by P3.75 or 5.48% to close at P72.15 apiece on Tuesday. — Aaron Michael C. Sy