UNION Bank of the Philippines, the country’s ninth-largest lender in terms of assets and led by the Aboitiz Group, said net income in the first quarter of 2018 jumped 33 percent to P2.9 billion from P2.2 billion a year ago backed by sustained growth in its core businesses.
The bank said in a disclosure to the stock exchange net revenue rose 21.5 percent to P6.9 billion.
The strong earnings resulted in an annualized return on equity and return on assets of of 15.9 percent and 2.0 percent, respectively.
The bank continued to sustain double-digit growth in terms of customer businesses. Total loans grew 15.9 percent to P293.1 billion year-on-year, with consumer loans accounting for 34 percent of total loan portfolio.
Total assets rose 17.3 percent year-on-year to P608.4 billion. Deposits reached P439.6 billion with CASA accounting for more than one-third of total deposits.
Asset growth was also supported by the successful $500 million medium term notes issuance in November last year.
“Given our positive earnings performance in the first quarter, we are confident that we can attain our full-year target. We recognized gains from our investment portfolio following the adoption of the new PFRS 9 accounting standards,” Jose Emmanuel Hilado, UnionBank treasurer and chief financial officer, said in a statement.
“We expect earnings in the succeeding quarters to once again come from recurring income as we continue to grow our balance sheet,” he said.
UnionBank president and chief executive Edwin Bautista said the bank started the year strong. “Our solid profitability results are quite timely as it allows us to fast-track our investments in digital transformation. We made it clear at the start of the year that we will invest in Blockchain technology for our internal operations and the inevitable internet of finance,” he said.
The bank plans to raise an additional capital of up to P10 billion through a stock rights offering to finance future growth.
The bank said its board of directors approved the fund-raising activity in a meeting on April 27, 2018,
“The additional capital will increase the bank’s Common Equity Tier 1 and total capital adequacy ratio of the bank. The proceeds from the stock rights offer will be used to allow for continued growth of assets of the bank,” it said.