Union Bank sees lower earnings

Union Bank of the Philippines (UBP) is likely to post lower earning this year due to weak economic conditions, a bank official said yesterday.

"At the rate we are going right now, we are likely to post about P800 million," UBP corporate planning head Ropi Dangazo said in an interview during the Bank Marketing Association of the Philippines (BMAP) conference.

According to Dangazo, the bank earned about P1 billion as of end-1999 and P402 million in the first six months of the year.

He said most of the banks have expressed the same apprehension that their earnings this year would drop compared to last year.

"We expect a slower earning growth together with the other banks in the industry," he said.

UBP chairman Justo Ortiz, said they have allotted P40 to P50 million each year for their expansion program.

Ortiz said they are just awaiting the approval of the Bangko Sentral ng Pilipinas (BSP) for the purchase of at least eight branches of a commercial bank located in Northern Luzon.

According to Ortiz, they are expanding their branch network along with their enhancement strategy for the bank’s e-banking facilities. The additional eight branches will bring UBP’s total branch network to 115 branches.

These additional branches will allow UBP to strengthen its presence in the northern part of the country where it has a minimal exposure.

Ortiz also said they are sticking to their earlier strategy of growing their operations through information technology enhancement.

He said, they do not have immediate plans of merging with other banks. But he said they are still open to possible strategic partnership if the need arises.

"Our paramount focus is to enhance our digital strategy that we believe will be more efficient and effective at the moment unlike mergers when the effects are expected to be felt about two to three years down the road," he said.

However, he said bank acquisition is one of the options they are exploring right now. "Benefits of merger take two to three years to be fully developed but we believe that acquisitions would be an option," he said.