UNION BANK of the Philippines, Inc. (UnionBank) booked a net income of P3.1 billion in the second quarter amid strong revenues, it said on Monday.
This was 55% higher than the P2-billion net profit it posted in the first quarter, UnionBank said in a disclosure to the stock exchange.
However, this was below the P3 billion in attributable net earnings that it recorded in the second quarter of 2023, based on its quarterly report for that period.
Its latest financial statement was unavailable as of press time.
“We continue to post strong topline revenues. Now that we have completed the integration of the acquired Citi consumer business, the parent bank’s expenses have naturally declined. As a result, our net income in the second quarter of the year is at P3.1 billion, which is up by more than 50% from the P2 billion booked in the previous quarter. Our focus on the higher margin consumer segment and continued expansion of our customer base will allow us to sustain this growth momentum in the years to come,” UnionBank Chief Financial Officer Manuel R. Lozano said.
UnionBank’s acquisition of Citigroup, Inc.’s Philippine consumer banking business was completed in August 2022. The transaction was valued at P55 billion.
The bank’s second-quarter performance brought its net income for the first half to P5.07 billion.
This was likewise lower than the P6.34-billion attributable net profit it recorded in the same period last year.
UnionBank said its revenues grew by 8.3% year on year to P37.3 billion in the first semester.
“The growth in net revenues is driven by the bank’s expanding consumer business, higher net interest margin, and growing transaction fees,” it said.
Net interest income also increased by 14.8% to P27.497 billion in the first half. Interest earnings stood at P40.876 billion, while interest expenses totaled P13.379 billion.
The bank’s net interest margin improved by 55 basis points to 5.7%, it said.
“The bank’s net interest margin is among the highest in the banking industry at 5.7% coming from the higher proportion of consumer loans to total loans. Consumer loans now account for 59% of its total loan portfolio, which is nearly three times higher than the industry average,” UnionBank said.
Non-interest income stood at P9.814 billion.
Meanwhile, the lender’s operating expenses inched down by 2.4% year on year to P21.568 billion as of June.
“Following the successful migration of the acquired Citi consumer business into UnionBank’s system in March, the bank’s IT (information technology) expenses have declined by close to P1 billion quarter-on-quarter,” it said.
“The decline in IT expenses was partly offset by inherent costs related to customer acquisition and revenue growth. New-to-bank customers more than doubled versus last year’s monthly average. As a result, the bank now has over 15 million total customers,” UnionBank added.
Provisions for credit losses amounted to P8.988 billion in the first semester.
The bank’s net loans and other receivables stood at P514.77 billion in the first half.
On the funding side, total deposits stood at P666.05 billion. Its low-cost current account, savings account or CASA deposits were at P427.8 billion.
UnionBank’s assets were at P1.1 trillion at end-June, while total capital was at P187.14 billion.
The bank’s shares went down by five centavos or 0.14% to end at P36.05 apiece on Monday. — AMCS
