Union Bank profit down to P3B in H1

MANILA, Philippines - Profits of Aboitiz-led Union Bank of the Philippines plunged 33 percent in the first half of the year due to a sharp drop in trading gains on the back of subdued market conditions.

The bank, owned by listed Aboitiz Equity Ventures Inc. (AEV), booked a net income of P3 billion from January to June this year, P1.46 billion lower than last year’s P4.47.

The bank’s net interest income inched up 4.1 percent to P5.57 billion from P5.35 billion. Interest income from loans and receivables rose 2.9 percent to P7.71 billion from P7.49 billion, while interest expense was steady at P2.13 billion.

Union Bank’s non-interest income from service charges, fees and commissions as well as trading gains fell 27.9 percent to P3.54 billion in the first six months of the year from P4.91 billion in the same period last year.

The bank said trading gains plunged about 60 percent to P794.95 million from January to June this year compared to P1.97 billion in the same period last year on subdued market conditions.

The bank’s premium revenues rose 70.2 percent to P511.3 million from P300.35 million, spurred by the acceleration in pre-need sales of First Union Plans Inc. (FUPI) but miscellaneous income fell 55.72 percent to P450.31 million from P1.01 billion due largely to foreign exchange losses and the reduction in trust fund income of FUPI.

Union Bank’s total other expenses went up 3.8 percent to P4.97 billion from P4.79 billion due to higher depreciation and amortization costs mainly due to the branch expansion initiatives of City Savings Bank Inc.

The bank spent P5.73 billion to acquire City Savings Bank in 2013.

AEV, the listed holding firm of the Aboitiz Group of Companies, own 46.94 percent of Union Bank.

The universal bank has 270 branches as well as 245 on-site and 41 off-site ATMs nationwide.