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June 24, 2024

UnionBank’s earnings plunge 45% to P2.6-B in Q1

Union Bank of the Philippines led by banker Edwin Bautista booked at 45 percent drop in earnings to P2.6 billion in the first quarter of the year from P4.7 billion in the same period last year despite the 40 percent decline in provision for potential loan losses from the fourth quarter of last year.

The Aboitiz-led bank attributed the sharp drop in net income from January to March this year to the extraordinary trading gains recorded in the first quarter of last year.

UnionBank treasurer Jose Emmanuel Hilado said that the listed bank is confident of sustaining the 21 percent increase in recurring income in the first quarter of the year.

Despite the ongoing Russia-Ukraine conflict that could adversely affect investor and consumer sentiment, the banker said that the country’s economic fundamentals are strong enough to weather the challenges ahead.

“We, therefore, remain optimistic that improving credit appetite and spending patterns will allow us to sustain momentum in our recurring income for the rest of 2022,” Hilado added.

UnionBank’s net interest income went up by 12 percent to P8.1 billion from P7.2 billion, fueled by a doubling of fee-based income to P1.4 billion on the back of the growth of InstaPay charges and interchange fees.

Likewise, the year-on-year growth in recurring income could be traced to the six basis points increase in net interest margin to 4.6 percent brought about by higher yields in earning assets, coupled by lower cost of funds from the expansion of current account savings account deposits.

The total loans disbursed by the listed bank climbed by two percent to P351.8 billion, while total deposits grew by 15 percent to P577.2 billion.

The bank’s total resources grew by13 percent to P844.4 billion in the first quarter of the year from P747.3 billion in the same quarter last year.