editorial team
On track with its growth target for the year, Union Bank of the Philippines (PSE:UBP) recorded a net income of P4.7 billion in the first six months of 2018, up by 8% compared to the P4.4 billion posted in the same period last year. This was driven by a 9.1% hike in net revenues to P12.7 billion from P11.7 billion a year ago.
This translated to an annualized Return on Equity (ROE) and Return on Average Assets (ROA) of 12.8% and 1.6%, respectively, maintaining UnionBank’s current status as one of the most profitable, capital-efficient banks in the country.
The bank sustained its robust performance from last quarter given double-digit growth from customer businesses. UnionBank’s well-diversified loan portfolio increased by 18.0% year-on-year to P313.0 billion, with retail loans accounting for 33% of total loans. This boosted the bank’s total assets to reach P623.2 billion, up by 12.8% year-on-year from P552.6 billion in the same period a year ago. Assets were mainly supported by deposits at P452.9 billion.
“We are ahead of our target for the year despite margin compression in the first half due to higher interest rates and regulatory compliance. For the remainder of the year, we expect recurring income to drive profitability. We anticipate margins to improve as loan rates start to catch-up against deposit cost,” said Jose Emmanuel U. Hilado, UnionBank Treasurer and CFO.
“We have no doubt that we are on track in our digital transformation journey. The market has noticed. The bank was recognized as Asia’s Best Bank Transformation in the 2018 Euromoney Awards for Excellence. Moreover, our Project i2i in collaboration with rural banks, was highlighted in the technology space as a commendable use case of blockchain to drive societal change and inclusive prosperity. We look forward to launching more innovations in the industry as we aim to be among the pioneers in the field of blockchain technology and the token economy,” said Edwin R. Bautista, UnionBank President and CEO.
UnionBank’s delivery of its digital promise has yielded both awards and solid profits for the bank. Among its most recent and notable awards are the “Asia’s Best Bank Transformation” award from the 2018 Euromoney Awards for Excellence 2018, “Digital Banking Initiative of the Year – Philippines” and “Online Banking Initiative of the Year – Philippines” from the Asian Banking and Finance – 2018 Retail Banking Awards, “Best Customer Experience – Branch” from the Retail Banker International – 4th Customer Experience in Financial Services Awards, “Most Innovative Bank of the Year” and “Best Banking CEO for 2018” from the European – Global Banking and Finance Awards, and the “Digital Bank of the Year – Philippines” from The Asset Triple A Digital Awards.
