United Coconut Planters Bank, the eleventh-largest lender in terms of assets, said net income in the first three quarters declined 4 percent to P2.91 billion from P3.031 billion a year ago, as rising interest rates affected net interest margins.
The bank said in a statement Friday total interest income grew nearly 10 percent to P11.44 billion from P10.47 billion a year earlier, but higher cost of funds curbed the increase in net interest income to only 4 percent, or from P8.31 billion to P8.62 billion.
Loans, mainly coming from the consumer sector, fueled the continued rise of the bank’s interest earnings with the total portfolio expanding by P17.22 billion or 11 percent to P178.48 billion from P161.26 billion.
Non-interest income reached P1.82 billion, slightly lower than the previous P1.86 billion, as higher revenues from service charges, fees, bancassurance commissions and foreign exchange in the first nine months could not fully offset the contraction of trading and securities gain.
UCPB president and chief executive Higinio Macadaeg Jr. said that with the challenging environment likely to persist through the last quarter of the year, the bank would focus on businesses where it is particularly strong such as consumer lending, especially the real estate segment and bancassurance, which stand to grow with the continued expansion of the bank’s consumer loan portfolio.
“The bank will also take up more provisions towards the end of the year, a conservative move to cover the bank’s growing loan portfolio,” Macadaeg said.
