UnionBank books lower net income in 1^st quarter

UNION BANK of the Philippines, Inc. (UnionBank) booked a net income of P1.43 billion in the first quarter, it said on Monday.

UnionBank’s profit in the period was down from the year prior due to “one-time, tax-related write-offs from a subsidiary and front-loaded non-recurring costs,” it said in a disclosure to the stock exchange.

Its financial statement was unavailable as of press time.

The decline in the bank’s first-quarter net profit came even as its revenues climbed by 8.4% year on year to P19.4 billion in the period.

“Topline performance continues to be driven by a growing consumer business, expanding net interest margin, and increasing fee-based revenues,” UnionBank said.

“The underlying drivers of our financial performance remain solid. We continue to see substantial new client acquisitions month on month as well as expansion of our net interest margin and fee-based income. These indicate that the strong revenue trend will be sustained,” UnionBank Chief Financial Officer Manuel R. Lozano said.

“Moreover, if we normalize for the impact of one-offs, our net income would be comparable to prior quarters. Moving forward, we expect performance to get back to this trajectory and we remain confident that we will exceed our 2024 performance,” Mr. Lozano said.

The bank booked a net interest income of P15.39 billion in the first quarter, with interest earnings at P20.79 billion and interest expenses at P5.4 billion.

PNB’s net interest margin improved by 69 basis points (bps) to 6.3% on the back of the strength of its consumer lending business and lower funding costs amid growth in its low-cost current and savings account deposits and easing monetary conditions, it said.

“Currently, consumer loans account for 62% of the total loan portfolio, nearly three times higher than the industry average. This is attributed to a diversified strategy with credit cards, personal loans, and teachers’ loans exhibiting the fastest growth. The bank’s retail client base is now at 17.6 million, providing a solid foundation for growth in the future,” UnionBank said.

“Furthermore, fee-based income grew 21.3% to P3.7 billion as the larger customer base resulted in higher transactions. Fees-to-assets increased to 1.3% from 1.1% previously — one of the highest in the industry,” the bank added.

UnionBank’s non-interest income stood at P4.05 billion at end-March.

Meanwhile, operating expenses were at P11.53 billion in the quarter.

The bank also set aside P11.54 billion in provisions for credit losses in the period, it said.

UnionBank’s net loans and other receivables stood at P510.41 billion as of March, while deposit liabilities were at P684.28 billion.

Its assets stood at P1.16 trillion at end-March, while its total capital funds totaled P194.25 billion.

UnionBank’s shares dropped by 60 centavos or 1.84% to close at P32 each on Monday. — AMCS