AUB confident of hitting P4 billion profit guidance

MANILA, Philippines — Rebisco-led Asia United Bank (AUB) expects earnings to jump by 30 percent to P4 billion this year from P3 billion last year amid improving business and consumer confidence.

AUB president Manuel Gomez said the bank is on its way to meeting its consolidated net income target this year.

“We projected that 2021 will be a better year and we are on track with our targets so far. The easing of lockdown restrictions, the continuous vaccine rollouts by the government, and the improvement in the business climate should all bode well for the bank’s commercial and consumer lending businesses,” Gomez said.

The bank’s net income declined by 22 percent to P2.94 billion from January to September compared to P3.75 billion in the same period last year, as total operating income slipped by 18.9 percent to P9.37 billion from P11.54 billion.

AUB’s net interest income inched up by 1.2 percent to P8.2 billion from P8.1 billion, while other operating income plunged by 65.9 percent to P1.17 billion from P3.44 billion, as trading and securities gains only amounted to P17 million from P2.41 billion.

The listed bank managed to keep its operating expenses down by 25 percent to P5.53 billion from P7.35 billion on lower loan loss provision after setting aside a significant buffer last year to cover the credit risk brought about by the pandemic.

Provision for credit and impairment losses fell by 52.5 percent to P1.4 billion from January to September compared to P2.96 billion in the same period last year.

“We anticipate credit quality to continue to improve as the economy opens up, so our loan loss provision should be sufficient for the year. We also see better trading opportunities and stable operating expenses as the monetary policy stance remains accommodative to support the economy’s full recovery,” Gomez said.

The AUB Group’s net income translated to a return on assets of 1.3 percent and return on equity of 10.8 percent versus year-ago ratios of 1.8 percent and 14.6 percent, respectively.

The bank’s asset base inched up by nine percent to P317 billion as of end-September from a year-ago level of P291 billion.

Its loan book was flat at P165 billion, while total deposits grew by 13 percent to P262 billion as both the banking industry and consumers remained cautious in the third quarter.

For the third quarter alone, AUB’s net income fell by 31 percent to P998 million from P1.46 billion a year ago due to lower operating income.