UnionBank’s Net Income Increases by 30%
The Bank attributes this robust growth to recurring income as well as its higher yielding assets:
The Union Bank of the Philippines (UnionBank) posted a 30% increase in their net income for the first half of the year – from Php3.0 billion to Php3.9 billion. This significant growth is mainly attributed to the Bank’s recurring income from its net interest as well as their fee-based income.
The Bank’s net interest income alone grew by 30% to Php7.3 billion as a result of the year-on-year expansion in loan portfolio. Meanwhile, its fees-based income grew by 11% to Php2.0 billion which comes from an expanded customer base in both loans and deposits. Meanwhile, other non-interest income was down, mainly as a result of lower trading gains. And as the Bank focused on business and branch expansion during the first half of 2016, expenses grew by 6% to Php5.3 billion.
“This significant increase shows that our income is definitely sustainable. Loans, investments, total deposits and digital channel growth – channels for our core income – we are the key drivers. With this, we have been able to demonstrate the scalability of our infrastructure as well as our drive to further improve our products and services that take on a more customer-centric approach,” said Edwin Bautista, President and Chief Operating Officer of UnionBank.
UnionBank also reported that its total assets as of June 2016 was at Php439 billion, which came in as relatively flat compared to year-end 2015. Higher yielding assets in the form of loans and investment securities posted double digit growth from year-end 2015 – loans and other receivables grew by 12% to Php202 billion, which is attributed to the robust growth across all business segments; total investment securities, which are mostly at amortized cost, increased by 10% to Php121 billion; and total deposits grew by 8% to Php336 billion, with demand deposits posting a 10% year-to-date increase to Php115 billion.
With these results, UnionBank is even more committed to continue improving. Earlier this year, the Bank has set aside Php1.0 billion for capital expenditure a large portion of which will go to its digitization efforts. UnionBank currently has 300 branches nationwide.