UnionBank nets P8.3B in first 6 months of 2021


Following a double-digit increase in its first-half net profit, Listed Union Bank of the Philippines (UnionBank) is optimistic about meeting its targets this year.


The Aboitiz-led lender claimed it had a better first half of 2021, with net earnings of P8.3 billion, up 94 percent from the same period the previous year. This resulted in a return on investment of 15.9 percent.


However, the writer calculated that the company’s net income expanded by only 84.44 percent year-on-year in the first half of this year, compared to UnionBank’s P4.5 billion net profit for the same period last year.


The company’s net revenue grew by 16 percent to P25.5 billion. Because of broader net interest margins of 4.7 percent compared to 4.4 percent the previous year, net interest income jumped by 7 percent to P14.8 billion.


Non-interest revenue picked up by 33 percent to P10.7 billion due to strong trading gains, higher foreign exchange income, and higher fees and commissions.


“As non-performing loans (NPLs) started to stabilize,” loan loss provisions were P3.1 billion, plunging 56 percent from the previous year. As of the end of 2020, UnionBank’s NPL ratio had decreased to 4.7 percent from 5.1 percent.


At the end of June this year, total assets were P733.6 billion. Total loans and receivables declined 4 percent year-on-year to P336.9 billion “on muted corporate and commercial credit demand,” the bank mentioned. Total deposits in current and savings accounts, in the meantime, rose by 28 percent to P299.6 billion, a new high.


“Our strong first half performance and good trajectory gives us confidence that we will hit our full- year targets. Our NPLs are on a declining trend driven by proactive efforts to manage credit risk,” said Jose Emmanuel Hilado, UnionBank’s chief financial officer and treasurer, in the statement.


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