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Business

Union Bank gets license to underwrite securities

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The Securities and Exchange Commission has approved the application of Union Bank of the Philippines (UBP) to engage in underwriting activities.

UBP filed an application to operate as an underwriter of securities following the temporary suspension of operations of its investment house subsidiary, UBP Capital Corp. (UBPCC).

Citing weak market conditions, UBPCC said the thinning volumes were not enough to sustain operations.

UBP reported a 40-percent growth in net income last year to P1.54 billion from only P1.10 billion in 2001. Revenues, on the other hand, amounted to P3.8 billion, up 20.2 percent from P3.2 billion last year.

The bank cited strong growth across its businesses particularly in capital market activity, private banking, cash management, and retail banking. The bank’s operating efficiency continued to improve as its revenue-to-expense ratio increased from 1.68x in 2001 to 1.84 in 2002, and remained one of the best in the banking industry.

As of end-December 2002, the Bank’s total resources grew by 37 percent from P53.7 billion to P73.5 billion. Deposit liabilities, meanwhile, increased to P41.9 billion from P28 billion.

UBP set aside P250 million in additional loan loss reserves in 2002 to bring its reserve cover to 84 percent, among the highest in the industry. UnionBank’s non-performing loans as a percent of total loans stood at 11.32 percent, lower than the industry’s average of 16.36 percent as of end-October. As a percentage of total resources, the bank’s non-performing loans amounted to only 4.49 percent as of Dec. 31, 2002, about half the banking industry’s average of 8.38 percent as of Sept. 2002. – Zinnia dela Peña

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UNION BANK OF THE PHILIPPINES

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