AUB eyes return to pre-pandemic earnings in 2021

MANILA, Philippines — Asia United Bank has set a crucial target: it must return to its pre-pandemic financial form this year.

Achieving that goal means the company must grow its net income 30% year-on-year in 2021 to P4 billion, the listed lender told the stock exchange on Friday. Manuel Gomez, company president, is optimistic that the bank can hit that target.

“2021 will definitely be a better year than 2020, as we expect the vaccine rollouts by the government and the private sector to improve consumer confidence and lead to increased economic activity,” Gomez said.

“These, in turn, will boost our commercial and consumer lending business, which remain stable,” he added.

Like other lenders, AUB was not spared from the economic fallout of the pandemic. Last year, its net income sagged an annualized 31.8% rate to P3 billion. The bank had to sacrifice profitability and set aside P5.43 billion in 2021 to cover losses from soured debts, which cornered 3.23% of AUB’s entire loan portfolio as of end-2020 from just 0.96% in 2019.

This year, AUB said it expects a pick-up in lending activity, adding it is ready to set aside “appropriate loan loss provisions as required.” In the first quarter, the lender already segregated P638 million as buffer against credit losses.

The bank plans to spend P160 million for its planned digitalization initiatives this year.

On Friday, shares in AUB shed 0.45% to end the week at P43.80 apiece.