UnionBank posts higher net income in 3rd quarter

UNIONBANK of the Philippines, Inc. booked a higher net income in the third quarter, driven by double-digit growth in its revenues. 

The Aboitiz-led bank posted a net profit of P4 billion in July to September, higher by 17% from P3.4 billion in the comparable year-ago period, it said in a statement to the local bourse on Wednesday.

This brought its nine-month net profit to P10.1 billion, which translated to a return on equity of 10.4%, reflecting the impact of an additional P40-billion capital from the lender’s stock rights offer earlier in May.

UnionBank’s net revenues excluding trading gains in the first nine months jumped by 37% year on year to P36 billion. This is also higher by 23% to P14.2 billion in the third quarter from the second quarter of the year.

“This year, we made significant headways toward our aspiration of becoming a Great Retail Bank. Our consumer loans now account for 52% of our total loan book, which is more than double the industry average,” UnionBank President and Chief Executive Officer Edwin R. Bautista said.

“Our retail customer base has doubled in the past three years mainly coming from our digital account opening and cash management ecosystems,” Mr. Bautista said.

“We are seeing strong momentum in terms of new-to-bank customer acquisition. All these milestones have set us up for continued strong growth in the retail market,” he added.

The lender’s fee-based income climbed by 64% to P5.1 billion driven by client fund transfers and card transactions, bancassurance fees, and foreign exchange income. 

Net interest margin also rose to 4.9% in the first nine months of the year from 4.6% in the same comparable year-ago period due to a higher current and savings account (CASA) ratio and an expansion of earning assets.

Net loans went up by 37% annually to P449 billion at end-September. The bank’s CASA booked a record-high of 31% to P417 billion in the same period.

As of end-September, UnionBank’s total assets stood at P1.05 trillion as of end-September, rising by 37% year on year and crossing the one trillion mark in terms of assets for the first time.

UnionBank Chief Finance Officer Jose Emmanuel U. Hilado said the bank’s acquisition of Citigroup, Inc.’s Philippine consumer business added P98 billion to the its total assets, including P65 billion in net loans and P30 billion in cash. It also included P67 billion in deposits with a CASA ratio of 89%.

“We are confident that the integration would be seamless as 1,500 former Citi employees, including 100% of the senior management of the consumer business, have joined UnionBank,” Mr. Hilado said.

UnionBank’s acquisition of Citi’s local consumer unit, priced at P55 billion, was announced in December 2021 and completed on Aug. 1.

UNIONDIGITALMeanwhile, UnionDigital Bank, the digital banking subsidiary of UnionBank, recorded 1.73 million customers, $70 million in loans, and $50 million in deposits in its first four months of operations.

The digital lender said it saw double digit-growth in digital loans through ecosystem partnerships powered by its parent UnionBank.

UnionDigital was given a digital banking license by Philippine central bank in July 2021.

UnionBank shares closed at P80 apiece on Wednesday, rising by P3 or 3.9% from its previous finish. — Keisha B. Ta-asan