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Friday, March 29, 2024

UBP sees net profit rising 50% this year

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UNION Bank of the Philippines, the banking unit of the Aboitiz Group and one of the largest in the country, expects net income this year to increase 50 percent from a year ago even without the exceptional trading gains recorded in 2016.

Union Bank president and chief operating officer Edwin Bautista attributed the sustained expansion to the strength in core income.

“Last year we made about P10 billion net income… the growth rate was about 67 percent. Obviously, last year was an exception,” Bautista said, referring to trading gains realized mostly by banks in 2016.

“This year, the core income will continue to grow significantly although we don’t know what will happen to the trading income. But without the trading income… maybe… (we can grow by) more than 50 percent definitely,” he said.

He said Union Bank had a good chance of sustaining a loan growth of between 25 and 30 percent this year, mostly from consumers and small businesses that accounted for almost 50 percent of the bank’s clients.

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Bautista said the bank was currently on a digitization thrusts in a bid to strengthen existing markets and make the system more flexible.

“… All our digitization efforts have resulted in new businesses…. such as we can credit instantly… Banking can be 24 hours… Our systems are more flexible now…,” he said.

Bautista also said Union Bank remained open to new acquisitions, depending on how much added value it would gain on product range, new customer segment, and improvement in the bank’s presence, especially in the lower market such as small and medium enterprises.

Bautista said the bank remained strong, enough reason for them not to look for bigger partner. “We don’t need to raise capital right now because our growth in income has been very strong and we are on a sustainable growth path. (But) we are open to acquire for the right price,” he said.

Union Bank posted a record net income of P10.1 billion in 2016, up 67 percent from P6 billion in 2015. The profit translated into a return on equity of 16.9 percent. 

Total loans increased 31 percent to P235.4 billion, resulting in total assets breaching the half-trillion mark or at P524.4 billion. Total deposits grew 21 percent to P376.5 billion.

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