AUB posts 15% increase in net income

ASIA UNITED Bank Corp. (AUB) saw its consolidated net income rise by 15% in the third quarter to P2 billion as net interest income and non-interest income rose, it said in a statement on Monday.

Year to date, the lender’s net income grew by 32% to P6.1 billion due to continued business volume and margin growth, as well as higher non-interest income.

Its financial statement was unavailable as of press time.

“With our stronger performance in the first three quarters, we expect to maintain our lead among the country’s top 10 listed universal banks in terms of compounded annual growth rate (CAGR) on key indicators since AUB was listed on the bourse in 2013,” AUB President Manuel A. Gomez said.

AUB also noted its performance in the nine months through September was a record high.

This translated to a return on equity of 19.4%, up from 16.4%, while return on assets grew to 2.5% from 1.9%.

Net interest income grew by 20% to P11.2 billion at end-September due to business volume growth and increased yields, while non-interest income rose by 27% to P2.1 billion.

“Strong contributions to its non-interest income mainly came from AUB’s operating activities such as trading businesses, credit cards, AUB PayMate, and remittance,” AUB said.

This brought total operating income to P13.3 billion, up by 21% year on year.

Meanwhile, operating expenses rose by 12% to P4.8 billion, driven mainly by compensation increases and transaction volume-related expenses.

As a result, the bank’s cost-to-income ratio stood at 35.8%, down from 38.6% last year.

AUB’s gross loans went up by 7% to P188.2 billion due to more “robust” corporate and consumer borrowings.

“This resulted in a wider net interest margin of 4.9% from the previous year’s 4.1%,” AUB said.

The bank’s net nonperforming loans (NPL) ratio stood at 0.67%, while gross NPL ratio was at 2.14%.

NPL coverage ratio stood at 107%, up from 89.1% last year.

The bank set aside provisions amounting to P1.1 billion as of September, 12% higher than the P1 billion in the same period last year.

On the funding side, total deposits climbed by 8% to P284.5 billion from P262.3 billion.

“Low-cost CASA (current account/savings account) deposits comprised 70.6% of the bank’s total deposit base while its loan-to-deposit ratio stood at a healthy 66.2%,” AUB said.

The bank’s total assets rose by 8% to P344 billion at end-September.

Total equity also went up by 20% to P45.5 billion.

AUB’s common equity tier 1 ratio stood at 16.12%, while its capital adequacy ratio was at 16.77%.

“While we are seeing that the domestic economy has emerged strongly from the pandemic and many sectors are now on the path to recovery, we remain cautious of the confluence of global shocks that are unraveling,” Mr. Gomez said.

We expect monetary policy to remain hawkish, with inflation still not kept at bay. On the other hand, we see plenty of room for growth and collaboration, particularly in digital transformation,” he added. — Aaron Michael C. Sy