Union Bank of the Philippines, the 10th largest lender in terms of assets, expects a 31-percent loan growth this year, a top executive said Wednesday night.
“Our outlook this year is very bullish. Last year, we grew our loan book by 31 percent and we plan to do the same this year,” UnionBank president and chief operating officer Edwin Bautista told journalists in Bonifacio Global City, Taguig.
“Our growth drivers this year will be consumer and retail lending. Actually in 2016, we changed our business model. From being dependent on trading, we recalibrated it to lending which is the trend now in the industry,” Bautista said.
He said retail grew faster than corporate lending in 2016. He said in terms of revenue split, 70 percent of customer loan revenues came from retail which was composed of small businesses and individuals.
Bautista also said deposits grew 25 percent last year and this growth rate could still be achieved this year.
“We need to grow that much because our loan book is expected to grow 30 percent. We want to grow our securities book by 30 percent. So to fund that, we need to grow our deposit book by at least 25 percent,” Bautista said.
Bautista also said that as far as capitalization was concerned, the bank was not planning to do any capital-raising initiatives, adding “ our income is enough to build our CAR [capital adequacy ratio] upward.”
He also said the bank was not ruling out the possibility of acquiring other banks or other financial institutions but “if there is an acquisition opportunity, why not?”
UnionBank, the banking unit of the Aboitiz group, posted a record net income of P10.1 billion in 2016, up 67 percent from P6 billion in 2015. This translated into a return on equity of 16.9 percent.
Total loans went up 31 percent to P235.4 billion, resulting in total assets breaching the half-trillion mark, to close the year at P524.4 billion. Total deposits grew 21 percent to P376.5 billion.
The combined growth in customer loans and deposits resulted in recurring revenues increasing 21 percent to P19.2 billion. Net interest income expanded 22 percent to P14.8 billion, while fees grew 19 percent to P4.4 billion.