AUB Sees Rosier Results Amidst Headwinds in 2022

Asia United Bank (PSE: AUB) expects to further improve its position as one of the country’s fastest-growing publicly listed universal banks even as it braces for several headwinds in 2022.

During its Virtual Annual Stockholders Meeting yesterday (24 June 2022), AUB President Manuel A. Gomez said: “The Bank is definitely looking at improved profitability in 2022 despite the realization that it will be another challenging year overall for the economy.”

“2022 will not likely be the year that banks will return to their pre-pandemic growth levels. Aggressive business growth will still be sidelined in favor of greater liquidity and stability,” he added.

Thanks to improving business and consumer confidence that gave its core business a boost, the bank was also able to breach its end-2021 target of PhP4 billion, with a consolidated net income of PhP4.1 billion in 2021, 34% higher than PhP3.0 billion in end-2020. This translated to a Return on Assets of 1.3% and a Return on Equity of 11.1% coming from year-ago’s 1.0% and 8.9%, respectively.

In the first three months of 2022, AUB posted a consolidated net income of PhP1.3 billion, 78.8% higher than PhP736.0 million in the same period in 2021.

While there are plenty of headwinds ahead — such as an escalating inflation rate due to the country’s heavy import dependence, the shrinking value of the peso versus the U.S. dollar, and rising pressures to raise taxes — the bank can still manage to improve its net interest margin ratio which stood at 3.6% in 2021. This can be achieved by growing its low-cost current account/savings account (CASA) funds, which rose to nearly PhP220 billion in 2021, not only an all-time high for AUB but also one of the highest in the industry.

With digital in its DNA, AUB also expects to continue reaping the benefits of digitalization by increasing its productivity and operational efficiency. Amidst the increasing cost of doing business, AUB managed to keep a lid on its total operating expenses in 2021, which fell by 29% to PhP7.9 billion versus year-ago. The group also posted a cost-to-income ratio of 42.4% in 2021, better than the industry level.

Among the biggest contributors to its bottom lines in 2021 were its commercial and branch banking businesses, accounting for 56% (PhP2.3 billion) and 50% (PhP2.0 billion), respectively, of AUB’s PhP4.1-billion net income.

Ahead of the pandemic, the bank has already been making strides in the digital race with the launch of e-wallet HelloMoney, pioneering payments via QR and early adoption of the national QR PH code, and AUB PayMate, its all-in-one digital payment acceptance product.

In 2021, AUB expanded its digital offerings and became the first Philippine bank to offer PayMate Mastercard QR link that allows micro, small, and medium enterprises to accept Mastercard payments through QR technology, removing the need to invest in costly point-of-sale terminals.

It also forged a strategic collaboration with the Liquid Group of Singapore so AUB PayMate merchants can accept e-wallet payments from Thai QR and PayNow Singapore. This is in addition to AUB’s growing network of international partner brands that include UnionPay QR and China’s Alipay, aside from local e-wallet players such as GCash, GrabPay, Home Credit Pay, and ShopeePay.

HelloMoney also continued to post a triple-digit growth in transactions even as lockdown restrictions have started to ease towards the latter part of 2021. The number of HelloMoney transactions skyrocketed by 269% to 15.5 million, and the value of transactions reached PhP51 billion or 261%, higher than levels in 2020.

“We expect 2022 to be a better year if we continue our hard work, agility to respond to evolving challenges in our operating environment, and vigilance against the emerging variants of COVID-19,” said Mr. Gomez.

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