UnionBank 2019 Net Income Fell 6%

UnionBank posted a net income of PhP4.5 billion in the first semester, down 6% YoY. This translated to a return on equity of 9.2% vs. 11.1% last year.

As of June 30, 2020, total assets were at PhP751.5 billion, up 7% vs. last year, while total deposits increased by 19% YoY to PhP510.4 billion.

The Bank’s topline results remain solid. Revenues were up 55% YoY to PhP22.1 billion driven by the sustained increase in net interest income, as well as higher trading gains for the year. Net interest income grew 41% YoY to PhP13.8 billion due to higher earning assets and margin improvement. Other income was up 86% to PhP8.3 billion mainly due to trading gains.

Driving ADB customer loan growth was the expansion of consumer (+33% YoY), SME (+22% YoY), and commercial lending (+33% YoY). Margins rose 94bps to 4.5% driven by lower funding costs resulting from the robust growth of ADB CASA deposits (+21% YoY) and decline in market interest rates.

UnionBank further increased provisions for loan losses to Php7.0 billion in the first half of the year. The Bank deemed it prudent to add reserves ahead of the potential impact of the COVID-19 crisis on its credit portfolio.

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