Union Bank reports net income in H1

Aboitiz-led Union Bank of the Philippines (UnionBank) reported a decline in net income in the first semester of the year.

In a statement, Union Bank said yesterday that its consolidated net income reached P3 billion in January to June this year.

The bank’s latest income report is lower by 5.3 percent compared with billion profit stated in its unaudited financial report posted on the Philippine Stock Exchange (PSE) website.

Meanwhile, Union Bank reported an increase in net interest income in the first semester of the year due to the robust growth in its lending business.

According to Union Bank, its net interest income reached billion in January to June this year, higher 4 percent compared with the same period last year.

From April to June alone, Union Bank said net interest income grew by 13 percent year-on-year.

The lender added the two-pronged surge from both the retail and corporate banking segments also propelled UnionBank’s loan portfolio to grow 18 percent to billion at end-June this year.

Meanwhile, the bank’s total retail portfolio over the first half of this year rose 33 percent, while corporate portfolio expanded 11 percent compared to the same period last year.

The first half of 2015 also saw average peso current and savings account (CASA) levels reaching a new high of billion, or 32 percent of total deposit liabilities.

According to the bank, higher CASA is anchored on its continuing thrust of building up low-cost deposits through UnionBank’s cash management initiatives.

“Importantly, capital ratios remained well above the minimum regulatory requirements set by Basel III guidelines with 12.8 percent and 16.1 percent for Common Equity Tier 1 (CET1) and total Capital Adequacy Ratio (CAR), respectively,” the bank said.

The minimum requirements in Basel 3 are 8.5 percent for CET1, inclusive of a capital conservation buffer of 2.5 percent, and 10 percent for total CAR.

Ratios remain above industry standards as annualized return on equity and return on assets stood at 10.7 percent and 1.6 percent, respectively.

Revenue-to-expenses ratio is still close to 2.0x which still ranks as among the banking industry’s least-cost producers.