ASIA UNITED Bank Corp. (AUB) saw its consolidated net income rise by 16% to P2.3 billion in the first quarter on better interest margins and as it set aside less loan loss provisions, it said on Thursday.
The bank’s net profit in the period was a record for the lender and its subsidiaries, it said in a disclosure to the stock exchange.
The performance translated to a return on equity of 20%, the highest in the bank’s history, AUB said.
“It also registered a return on assets of 2.8%, the highest since AUB’s initial public offering in 2013,” it added.
Its financial statement was unavailable as of press time.
“We aim to deliver consistent performance throughout 2024 so we can remain as a ‘challenger bank’ among the country’s top listed universal banks,” AUB President Manuel A. Gomez said.
“With interest rates expected to remain elevated throughout the year, and global shocks a continuing concern, we will remain agile to sustain our performance,” he added.
AUB’s net interest income rose by 10% year on year to P4 billion in the first quarter amid an elevated rate environment and strong revenue growth from its loan portfolio and investment activities.
As a result, its net interest margin stood at 5.2% in the period, up from 4.8% a year prior.
Meanwhile, the bank’s operating expenses increased by 12% year on year due to higher compensation, capital expenditures, and business growth-related expenses.
“Despite the increase, AUB has maintained its operational efficiency as it continued to shift to digital platforms and automation,” the lender said.
AUB’s total loan portfolio stood at P188.3 billion at end-March.
Despite the increase in loans, the bank set aside provisions of P78 million, down by 89% from P709.2 million a year ago.
Its nonperforming loan (NPL) ratio also improved to 0.47% in the first quarter from the previous year’s 1%. NPL coverage ratio was at 116.7%, rising from 113% in the comparable year-ago period.
On the funding side, deposits stood at P283.3 billion at end-March, with 73% of the total being low-cost current account, savings account or CASA deposits.
As a result, the bank’s loan-to-deposit ratio was at 66.5% in the period.
AUB’s assets grew by 6% year on year to P346.7 billion at end-March.
Total equity went up by 18% to P50.7 billion, driven by retained earnings.
The bank said its common equity Tier 1 ratio stood at 17.55% as of March, while its capital adequacy ratio stood at 18.29%, both above regulatory requirements.
“In December 2023, AUB paid 50% stock dividend and special cash dividend of P0.33 per share. Prior to the stock dividend payment, it has already paid out P2 per share in two tranches (P1 each in July and in September 2023),” it added.
The bank’s shares dropped by 50 centavos or 1.15% to close at P42.80 apiece on Thursday. — A.M.C. Sy
