AUB Posts Double-digit Growth in Assets, Deposits in 1H 2021
A double-digit expansion in its deposit base enabled Asia United Bank (PSE: AUB) to grow its total assets by 16% to PhP336 billion in the first six months of the year compared to PhP289 billion a year ago.
The publicly listed universal bank posted a 22% increase in total deposits to PhP282 billion from the previous year’s level, fueled mainly by low-cost CASA deposits. On track with AUB’s objective to depend on low-cost funding, CASA deposits accounted for 71% of its deposit base, an improvement from the previous year’s 68% ratio.
Taking advantage of its stronger CASA and the prevailing lower interest rate in the market, AUB exercised its call option on its unsecured subordinated debt qualified as tier 2 capital. This led to a Capital Adequacy Ratio of 15.9% versus the previous year’s 16.9%.
Bucking the overall weakness in loan appetite due to sluggish consumer and commercial business activities, AUB was able to keep its net interest income on the same level as a year ago at PhP5.4 billion.
However, lower gains from trading and securities resulted in a 15% decline in the consolidated net income of AUB and its four subsidiaries, posting PhP1.9 billion in the first half compared to PhP2.3 billion last year. This translates to a return on equity of 11% and return on assets of 1.2%.
The bank set aside PhP896 million in provision for loan losses in the first half of 2021. This was 41% lower than the PhP1.5-billion buffer it allocated in the same period last year to cover the credit risk brought about by the pandemic.
AUB managed to keep its operating expenses down by 3% to PhP2.7 billion from PhP2.8 billion a year ago as it continued to outperform the industry in terms of efficiency. Its cost-to-income ratio stood at 45.1% versus the industry’s 53.8%. Growing customer acceptance of its digital channels also helped trim its operating cost as well as increase efficiency and productivity. As of end-June 2021, AUB has a network of 270 branches nationwide, including 48 branches of its 4 subsidiaries.
“We expect 2021 to be a better year than 2020 due to the vaccine rollouts by the government and the private sector that will help improve consumer confidence and lead to increased economic activity. However, we remain cautious and vigilant about the COVID-19 variants and the economic impact of the ongoing pandemic. We are not letting our guard down,” said AUB President Manuel A. Gomez.