UnionBank posts P12.67-B net income in 2022

UNIONBANK of the Philippines, Inc. booked a net income of P12.673 billion in 2022 amid improved net revenues and net interest income.

The bank said in a disclosure to the local bourse on Monday that its net earnings inched up from the P12.578 billion posted in 2021 and translated to a return on average equity of 9.7%, “which takes into consideration the impact of the P40-billion additional capital coming from the stock rights offer last May 2022.”

“Revenues mainly came from net interest income and fee-based income, which compensated for the absence of trading gains,” UnionBank said.

Its financial statement for 2022 was unavailable as of press time.

The lender said its net revenues climbed 16% year on year to a record high of P52.2 billion in 2022.

Net interest income rose to P38.9 billion from P29.815 billion amid higher margins and volume.

UnionBank’s net interest margins expanded by 27 basis points to 4.9% on the back of the higher share of consumer loans in its lending portfolio and the 29% growth in its low-cost current account, savings account or CASA deposits.

Deposits with the bank grew by 25% to P711.3 billion amid the expansion of its retail customer base and “the strong take up of cash management products from large corporates.”

Meanwhile, loans rose by 42% to P479.2 billion on the back of growth in consumer loans of both UnionBank and its thrift unit CitySavings Bank, as well its acquisition of Citigroup, Inc.’s consumer business.

“Fees and other income doubled to P13.4 billion largely due to the consolidation of the acquired Citi consumer business, as well as growing digital customer transactions,” it added.

UnionBank’s acquisition of Citi’s Philippine consumer banking business was completed in August 2022.

The transaction, valued at P55 billion, covers Citi’s credit card, unsecured lending, deposit and investment businesses, as well as Citicorp Financial Services and Insurance Brokerage Philippines, Inc., which provides insurance and investment products and services to its retail clients.

On the other hand, the bank’s provisions for credit losses dropped to P4.048 billion from P5.811 billion.

Other income declined to P13.299 billion in 2022 from P15.301 billion.

Meanwhile, its operating expenses climbed to P31.528 billion from P24.32 billion the year prior.

UnionBank’s total assets stood at P1.09 trillion at end-December 2022, up from P831.095 billion in 2021.

“At the start of 2022, we made a commitment to execute on key strategic imperatives. First, the seamless integration of the acquired Citi consumer business, which includes customers and employees. Second, the commercial launch of UnionDigital as one of the six digital banks licensed by the Bangko Sentral ng Pilipinas,” Edwin R. Bautista, UnionBank president and chief executive officer, was quoted as saying in a statement.

UnionDigital Bank, UnionBank’s online lender, began operating in July 2022.

“We delivered on our promise and the market has rewarded us for it. Our recent stock performance, increase in stock trading volumes, and the strong commitment from our major shareholders on our stock rights offering reflect shareholders’ trust in the value that will be created from the execution of our strategies,” Mr. Bautista added.

UnionBank Executive Vice-President and Chief Finance Officer Manuel R. Lozano said the shift in the lender’s business model allowed it to post a strong performance last year.

“We have a solid balance sheet that continues to provide us above industry net interest margins. The shift in digital also allowed us to grow our fees coming from mobile fund transfers and payments. We were able to book the same bottom line as the previous year, but with less reliance on trading,” Mr. Lozano said.

UnionBank shares closed at P97 each on Monday, rising by P3.50 or 3.74%. — BVR