AUB’s Q1 income boosted by loan demand

ASIA United Bank Corp.’s (AUB) net income rose by 54% in the first quarter, boosted by demand for commercial loans amid an economic reopening.

In a statement, the publicly listed lender said earnings rose to P2 billion from P1.3 billion a year earlier. “This resulted in a return on equity of 19.9% and a return on assets of 2.5%.”

Net interest income climbed by 31% to P3.7 billion, driven by a 10% growth in its loan portfolio to P185 billion.

This resulted in a 35% increase in operating income to P4.5 billion. Its net interest margin was 4.8% at end-March, 100 basis points higher than a year earlier.

“Further boosting the bank’s operating income was the 282% increase in its trading and securities gains,” AUB said in a statement to the Philippine Stock Exchange.

Operating expenses excluding loss provisions rose by 7%, resulting in a cost-to-income ratio of 33.2%, lower than 41.7% a year earlier.

“We are reaping the fruits of our sustained investments in automation enhancements and process optimization to deliver quality services to our customers efficiently at less cost,” AUB President Manuel A. Gomez said in the statement.

AUB’s assets increased by 5% to P328 billion last quarter from a year ago. Total deposits also rose by 5% to P273 billion.

The bank said low-cost current and savings account deposits made up 72.97% of its total deposit base. Its loan-to-deposit ratio stood at 67.8% last quarter.

The bank said its bad loan ratio improved to 0.95% from 1.9%.

“Provision for losses increased by P300 million, strengthening its nonperforming loan coverage ratio to 114.3% from 81.5% year on year,” it added.

The bank had a total equity of P43 billion last quarter, with an indicative common equity tier 1 ratio and capital adequacy ratio stood of 15.41% and 16.03%, respectively. Both were above regulatory requirements.

AUB shares rose by 0.48% or 20 centavos from a day earlier to P42.20 each. — Aaron Michael C. Sy