Aboitiz-led Union Bank of the Philippines (UnionBank) recorded a net income of P2.6 billion in the first quarter of 2022, which translated to a return on equity of 9.2%.
UnionBank’s recurring income grew 21% compared to the same period last year as net interest income increased by 12% to P8.1 billion and fee-based income more than doubled to P1.4 billion. Net Income, however, was lower by 45% due to extraordinary trading gains recorded in 1Q2021.
“The optimism generated by the reopening of the economy is palpable and if the pandemic is behind us, we are hopeful that the economic gains since 2021 are sustainable,” said Jose Emmanuel Hilado, treasurer and head of Corporate Planning Services, UnionBank. “While the ongoing Russia-Ukraine conflict could adversely affect investor and consumer sentiment, we think that the country’s economic fundamentals are strong enough to weather the challenges ahead. We remain optimistic that improving credit appetite and spending patterns will allow us to sustain momentum in our recurring income for the rest of 2022.”
UnionBank ascribes the year-on-year (YoY) growth in recurring income to the net interest margin which improved by 6bps to 4.6% brought about by higher yields in earning assets and fee-based income which came from the growth of InstaPay charges and interchange fees.
As of end-March 2022, UnionBank’s total assets were at P844.4 billion, 13% higher than the same period last year. Total loans and receivables were at P351.8 billion, up 2% YoY. Total deposits were higher by 15% to Php577.2 billion primarily driven by the sustained growth of CASA deposits at 28% to Php356.5 billion.
“For the acquisition of Citi’s consumer business, we have already obtained approvals from the Philippine Competition Commission and Insurance Commission,” said Edwin Bautista, president and CEO, UnionBank. “Our Stock Rights Offering, which will fund the acquisition, is already in motion and expected to conclude in May 2022. We remain confident to become the legal owner of the consumer portfolio by July 2022. Moreover, our digital bank UnionDigital, is also on track to launch by the second half of the year. We are closely working with the regulators to complete key requirements for the start of our operations.”