UnionBank Q2 2019 Net Income Surges 22%
Union Bank of the Philippines (PSE:UBP) 2Q2019 net income at PhP2.6 billion, up 22% versus 1Q2019 driven by double-digit growth in net interest income and lower operating expenses. Net interest income increased by 11% quarter-on-quarter (QoQ) to PhP5.2 billion driven by higher earning asset base and improving margins.
For 1H2019, net income was at PhP4.8 billion, up 2% year-on-year (YoY) as the Bank sustained the growth of earning assets despite lower margins and strategic investment in its digital transformation. Higher fee income from consumer businesses and securities trading gains also contributed to the improved bottomline in the first half of 2019.
Profitability and efficiency ratios were above industry and better than YE2018 with return on equity (ROE) at 10.6%, return on assets (ROA) at 1.4%, and revenue-to-expense ratio at 1.7x.
As of end-June 2019, UnionBank’s total assets were at PhP704.5 billion, higher by 13% YoY. Customer loans amounted to PhP328.3 billion, with credit cards (+39% YoY), consumer business (+31% YoY), and commercial loans (+16% YoY) driving the portfolio growth.
“The continuous improvement of our margins contributed to our strong topline results. OpEx growth was also kept manageable amid the integration of PR Savings Bank with CitySavings and continued investments in digital transformation. We are optimistic that we can sustain this momentum for the rest of the year, with potential upsides to our margins, as interest rates start to normalize,” said Jose Emmanuel U. Hilado, UnionBank Treasurer and CFO.
“We are clearly seeing the fruits of our transformation push. Our improved efficiencies enabled us to onboard more retail customers into our platforms. We were able to manage expenses without slowing down on our strategic initiatives. Moreover, we successfully launched our technology and innovation company, UBX. Our i2i and XLog platforms are gaining traction, and we are on our way towards building an MSME lending platform in partnership with the fintech arm of one of the world’s largest financial institutions (Ping An’s OneConnect). Lastly, we are honored to receive several recognitions from the BSP, particularly “Digital Excellence Award” and “Outstanding Partner for Digital Transformation”. These are affirmative citations of the BSP’s support towards our vision and mission to “Tech-Up” the industry for a more inclusively prosperous Philippines,” said Edwin R. Bautista, UnionBank President and CEO.
