Union Bank of the Philippines (UnionBank) posted a net income of P5.1 billion in the first half of 2024. The bank attributed this to its solid performance posting top-line revenues amounting to P37.3 billion.
This marks an 8.3% increase compared to the same period last year, driven by the bank’s expanding consumer business, improved net interest margin, and rising transaction fees.
The bank’s net interest income rose by 14.8% to P27.5 billion, attributed to a 55 basis point improvement in net interest margin. UnionBank’s net interest margin now stands at 5.7%, which, according to the bank is one of the highest in the banking industry, largely due to the higher proportion of consumer loans, which now account for 59% of its total loan portfolio — nearly three times the industry average.
Operating expenses improved by 2.4% year-on-year to P21.6 billion. Following the successful integration of the acquired Citi consumer business into UnionBank’s system in March, the bank’s IT expenses decreased by close to P1.0 billion quarter-on-quarter. However, this decline was partly offset by costs related to customer acquisition and revenue growth. The number of new-to-bank customers more than doubled compared to last year’s monthly average, bringing the total customer base to over 15 million.
As of June 2024, UnionBank’s total assets stood at P1.1 trillion, with total loans and receivables — net reaching P514.8 billion, and low-cost CASA deposits at P427.8 billion.
“Now that we have completed the integration of the acquired Citi consumer business, the Parent Bank’s expenses have naturally declined,” said Manuel Lozano, chief financial officer of UnionBank.
Lozano noted that as a result, the bank’s net income in the second quarter of the year is at P3.1 billion, which is up by more than 50% from the P2 billion booked in the previous quarter.
“Our focus on the higher margin consumer segment and continued expansion of our customer base will allow us to sustain this growth momentum in the years to come,” Lozano said.