AUB secures high credit rating

MANILA, Philippines — Asia United Bank Corp. (AUB) obtained a high credit rating of PRS Aa plus (corp.) from local credit watchdog Philippine Rating Services corp.

 A company rated “PRS Aa” differs from the highest rated corporates only to a small degree, and has a strong capacity to meet its financial commitments relative to that of other Philippine corporates. The “plus” further qualifies the assigned rating.

AUB was also assigned a  stable outlook, which indicates that the rating is likely to be maintained or to remain unchanged in the next 12 months. 

In issuing the rating, PhilRatings considered AUB’s highly-experienced management, competitive strategy, which is in line with its growth targets, its robust profitability and  satisfactory funding profile.

PhilRatings also considered the banking industry’s favorable outlook, despite the slowdown in the growth of the domestic economy. 

 Despite being a mid-sized player in the country’s universal and commercial banking sector, AUB’s total assets reached P251.7 billion as of June 30.

Data from the Bangko Sentral ng Pilipinas (BSP) showed that AUB was the country’s 14th largest bank based on assets, deposits, and loans and receivables, as of the end of the first half. It was also 12th biggest in terms of total capital accounts.  

AUB is headed by Abraham  Co as chairman and chief executive officer and Manuel Gomez as president.

Co is considered to be highly-experienced in the banking and finance industry while Gomez has been with the bank since it opened in 1997.

 ‘AUB’s funding profile was satisfactory as of end-2018, with deposits accounting for 92.6 percent of total liabilities. The share of current and savings accounts (CASA), which are considered as less expensive and more stable funding sources, to total deposits was at 75 percent  in 2018,” AUB said.

Time deposits, on the other hand, doubled to P47.4 billion in the last two years. Total deposits increased by 21.1 percent  to P193.1 billion.

During the first half of 2019, total deposits further increased by 5.2 percent  to P203.1 billion due to higher CASA. Forecast shows that CASA will continue to comprise bulk of the bank’s deposits, going forward.

AUB posted a 63.3 percent jump in its first semester net income.

Interest income on loans and receivables, which remained the largest revenue source, jumped by 41.5 percent.  It accounted for 85.4 percent  of total interest income.

 “Over the projected period, AUB is well-positioned to sustain its performance as interest income will remain the primary growth driver, as the bank intensifies its commercial and consumer lending activities,” PhilRatings said.

 AUB will continue to anchor its competitive strategy on its modern technology platform, expanding branch network, and highly-experienced management team.

The bank will likewise continue to rely on its IT infrastructure, which will allow the bank to respond to the demands of its customers in a cost-efficient manner.