Union Bank expects 15% income growth

MANILA, Philippines - Union Bank of the Philippines, the main banking unit of the Aboitiz group expects its income to remain at double digit level this year despite the prevailing high interest rate regime.

“As far as income is concerned, core income remains strong excluding extra ordinary trading gains. Our income will be more diversified with consumer finance in the forefront,” Union Bank president & COO Victor Valdepeñas said.

He said the bank is hoping to go beyond the 15-percent income growth this year, with consumer banking income to surpass 20 percent, following the acquisition of City Savings Bank.

The Union Bank executive said the bank also expects loan growth to reach 25 percent in 2014, as it continues to expand market reach.

For this year, the bank is planning to put up 30 new branches, 15 each for Union Bank and City Savings Bank.

At present, Union Bank and City Savings Bank have a combined network of 240 branches.

Despite the expected ASEAN Economic Community integration in 2015, Valdepenas said Union Bank has no plans to expand yet in the international market but will instead grow the bank organically and domestically.

“At the moment, we do not have any plans for expansion abroad. We would like to focus our efforts in growing the bank here especially with the new acquisition of City Savings,” he said.

He also reiterated plans to participate in the bidding for Export & Import Bank and United Coconut Planters Bank.

He said they would also be participating in various biddings such as Public and Private Partnership (PPP) programs of the government.

In the first quarter of 2014, Union Bank posted a 61-percent drop in net income to P1.54 billion from P4 billion in the same period 2013.

Net interest income gained nearly 25 percent to P2.56 billion from P2 billion during the quarter.

Loans expanded by two percent to P2.13 billion this year from P2.09 billion in the first three months of 2013.

Deposits likewise inched up to P988 million, or a nearly two percent from year ago’s P969 million.