Union Bank of the Philippines, the ninth-largest lender in terms of assets and controlled by the Aboitiz Group, posted a 24-percent decline in net income in the first quarter of 2019 to P2.2 billion from P2.9 billion a year ago.
The bank said in a statement Monday the January-to-March net profit was, however, 75-percent higher compared to the level in the fourth quarter 2018 due to higher earning asset base, lower operating expenses, and provision for losses.
“Large non-recurring income made 1Q 2018. But 1Q 2019 up significantly over the previous quarter and 16 percent over budget,” bank president and CEO Edwin Bautista said through a text message when asked for comment on the first quarter decline.
“Assets yields are starting to catch up in the first quarter of 2019 as assets reprice. With a more stable interest rate and lower inflation environment this year, we expect margins to improve towards the end of the year and recurring income to have an increased contribution to our bottomline” said UnionBank treasurer and chief financial officer Jose Emmanuel Hilado.
Bautista expressed confidence the bank would be able to sustain the double-digit expansion of its lending businesses with 2019 marking its fifth consecutive year of above-industry loan growth.
“On the digital front, we want the market to watch out for the roll-out of more Arks, the launch of more functionalities in our UnionBank Online app, and deployment of the 100 cadets from our Blockchain Institute to tech-up our customers,” said Bautista.
Operating expenses declined 12 percent to P4.3 billion while provision for losses was down by 70 percent. Net revenues increased 2 percent to P7 billion.
Earnings performances resulted in a return on equity of 9.6 percent, return on assets of 1.3 percent and revenue-to-expense ratio of 1.6x.
UnionBank’s total assets as of end-March 2019 breached the P700-billion mark. Customer loans reached P315 billion with retail loans accounting for more than one-third of total loans.
The bank early April bank launched the country’s first Bangko Sentral ng Pilipinas-compliant, two-way cryptocurrency automated teller machine, making it among the first in Asia to do so.