UCPB seen to continue strong growth momentum

MANILA, Philippines - For the past three years, universal bank United Coconut Planters Bank (UCPB) has been on a progressive growth path and is targeting this year a P4-billion profit, which is unprecedented in the bank’s existence, along with plans to open five new branches as part of its efforts to reach out to more clients.

With the opening of five more branches, UCPB’s total branch network will grow to 193 this year.

UCPB turned around its finances in 2009 when it posted a profit of P1.66 billion from a loss of P2.71 billion the previous year.

Profits further grew to P2.45 billion in 2010 and P3.05 billion last year which was a robust 25 percent increase from 2010.

UCPB aims to achieve a P4 billion net income for 2012 by creating more technology-driven products while expanding its loan portfolio, remittance business, fee income and branch network to drive revenue growth.

“We are optimistic that we can sustain UCPB’s growth momentum for the past year given our associates’ commitment to building a bigger and stronger financial institution and our clients’ loyalty to the UCPB brand,” UCPB president and chief executive officer Jeronimo Kilayko said.

The bank attributed the strong growth in net income last year to a robust increase in its interest income due to growth in loan portfolio, higher treasury trading income, its aggressive sale of Real and Other Properties Owned or Acquired (ROPOAs), replacement of Double Your Money scheme with the more cost-effective Long Term Negotiable Certificates of Deposits (LTNCDs) and high-yielding instruments, generating low-cost current and savings accounts and increased loan bookings.

The increase in the bank’s net interest income in 2011 was due to the low funding costs of loans booked during the period, coming from inexpensive checking and savings accounts (CASA) generated by the branches which grew by 9.9 percent from P99.87 billion in 2010 to P109.76 billion in 2011.

Of the P57.5 billion total loans booked in 2011, P42 billion or 73 percent came from the corporate segment while the biggest growth came from the consumer loan segment which expanded by 34 percent to P15.5 billion from 11.6 billion a year ago.

Total deposits also increased by 7.4 percent or P11.1 billion from P149.9 billion to P161 billion with CASA comprising 68 percent of the total.

While UCPB’s non-interest income in 2011 went down by 13.6 percent to P1.9 billion from P2.2 billion in 2010 caused by the change in government policies on clearing as well as lower foreign exchange gains due to a strong peso, UCPB, on the expense side, was able to reduce its operating costs in 2011 by 13 percent from P5.4 billion to P4.7 billion as the bank embarked on various automation projects designed to streamline the bank’s processes.