UnionBank retains 10-15% earnings growth target

MANILA, Philippines - Aboitiz-led Union Bank of the Philippines is sticking to its earnings growth guidance of 10-15 percent this year, the same benchmark over the past years, the bank’s top official said.

UnionBank chairman and CEO Justo Ortiz told reporters during the Aboitiz annual stockholders briefing that they are confident they would be able to meet the target.

For the first quarter, UnionBank reported an unaudited net income of P4.002, a strong 40.7-percent increase from P2.843 billion in the same period in 2012.

For the whole of 2012, the bank registered a 15-percent increase in net earnings to P7.58 billion from P6.59 billion in 2011.

Ortiz said the earnings this year would be boosted by the expansion of the bank’s network following its recent acquisition of City Savings Bank.

He said they intend to increase the exposure to 60 percent of the Luzon market as operation remains basically concentrated in Cebu.

The new City Savings branches would be put up in areas where Unionbank is not located.

Moreso, he said there is also no need to raise funds this year to jack up UnionBank’s capital.

“Capital ratio right now is way above the Basel 2 (standard) even net of consolidation of City Savings,” he said. “Clearly there is no need to issue notes.”

UnionBank’s total resources expanded 13 percent to P315 billion from P279.7 billion registered at the end of 2012.

Capital funds stood at P52.6 billion, or 10 percent more than the P47.8 billion at end 2012.

Meanwhile, net interest income in the first three months of 2013 rose 15.5 percent from P1.773 billion in the same period in 2012 to P2.049 billion.

Non-interest income zoomed 35 percent, from P3.92 billion in January to March 2012 to P5.3 billion this year. Service charges, fees and commission as well as trading gains were the main drivers of the extraordinary growth.

Loans grew slightly from P1.75 billion in the first semester of 2012 to P2 billion in the same period this year.

Service charges, fees and commission rose by 185 percent to P509 million, while trading gains rose 28 percent to P3.37 billion.

Total loan portfolio stood at P98.1 billion while total deposit liabilities amounted to P212.8 billion.

Union Bank has a branch network of 186,  with 232 onsite and offsite automated teller machines (ATMs).