From P2.15 billion last year, UBP forecasts its net earnings to reach between P2.35 billion to P2.4 billion this year.
But in the first three months of the year alone, net income has breached the P500 million mark or a 63 percent growth over the same period in 2003.
"We are happy to see that our first quarter growth reflects the type of quarterly advancement in income," Victor B. Valdepeñas, UBP president and chief operating officer said.
However, the modest 2004 growth target takes in consideration increasing interest rates, increasing oil prices that could stifle economic growth, and a slowing regional economy, he said
Higher interest rates tends to dampen borrowing from the consumer and corporate markets which, in turn, slows down economic activity. "It will be more difficult to push business with a soft market," Valdepeñas added.
On the other hand, the 2004 growth drivers will rely on corporate cash management, payment services, foreign exchange, capital markets, corporate finance, and consumer finance.
Cash management will play a major role in the expansion of its corporate market. It will focus on transactional products like cash management that do not require significant commitment of UBP’s funding base. "We will continue to introduce new products while enhancing existing products to meet the market’s needs," Valdepeñas stressed.
UBP also hopes to earn from the disposal of bad assets worth at least P700 million this year after it sold practically the same amount last year.
The bank’s real or other properties owned and acquired (ROPOA) stood at about P4.9 billion although its non-performing loans (NPLs) ratio was placed at 16.7 percent. Union Bank has 112 branches nationwide with 94 ATMs, including a call center and Internet banking services.