UnionBank's first-half net income surges 113%

MANILA, Philippines — Union Bank of the Philippines saw its net income more than double in the first half of the year, reaching P6.9 billion, an 113 percent surge from the same period a year ago. This robust profitability was propelled by stronger consumer lending, higher fee-based income, and improved asset quality. In a disclosure on Monday, the Aboitiz-led bank reported a net income of P6.9 billion for the January-to-June period, up 113 percent from a year earlier. READ: UnionBank delivers 167% Q1 earnings growth “Our customer franchise remains strong; asset quality continues to improve; and we are confident that we can continue the positive profitability trajectory. At the same time, we are taking deliberate steps to simplify the group and rationalize businesses where we believe resources can be better deployed,” chief financial officer Manuel Lozano said. The parent bank accounted for 96 percent of the group’s earnings, sustaining the momentum seen in the previous quarter. Net revenues climbed 9 percent to P43.1 billion, supported by expansion in consumer lending, growth in low-cost current and savings account deposits, as well as higher fee income. Net interest income increased 8 percent to P33.7 billion, driven mainly by loan growth. Consumer lending remained the bank’s biggest growth driver, accounting for 61 percent of its total loan portfolio. Gross consumer loans expanded 10 percent, led by credit cards and personal loans, which collectively grew 18 percent. Meanwhile, net interest margin improved by 40 basis points to 6.9 percent, supported by the 7-percent increase in low-cost funding. The bank also posted stronger income outside its lending business. READ: UnionBank nets P10B, braces for future growth Noninterest income rose 12 percent to P9.4 billion, fueled by higher earnings from card-related fees, wealth management, bancassurance and other everyday banking transactions. UnionBank said these businesses benefited from its growing customer base, which reached 19.3 million during the period. The bank said it continued to build reserves to support future loan growth and reinforce its balance sheet following ongoing portfolio reviews. Even with these provisions, credit costs declined 19 percent to P9.4 billion, reflecting continued improvements in asset quality. INQ