Unionbank eyes number three spot in industry

Unionbank of the Philippines (Unionbank) remains among the top commercial banks in the country.

It was ranked first in terms of return on assets, second in terms of return on equity, third in terms of net profit, third in terms of cost-to-income ratio, and sixth in terms of market capitalization.

The Aboitiz-dominated commercial bank registrated a net profit of P1.1 billion last year. In the first four months of this year, the bank registered a 115-percent growth in net income from P295 million recorded from January to April 2001 to P636 million in the same period this year.

"For four straight years, we are listed among the world’s 25 soundest banks in the annual ranking of The Banker published in London," Justo A. Ortiz, Unionbank chairman and chief executive officer said.

Ortiz said that with that as their backdrop, the board of directors has set a goal for 2010 that would elevate the bank as the third leading universal bank in the country with 1.5 retail customers and 3,000 corporate customers.

Its long-term target was dubbed Focus 2010, which was designed to create superior finance value, operational excellence, customer franchise, a Unionbank brand, and speed of innovation.

It started the year with a P0.40 cash dividend declaration as its earnings per share grew by 32 percent to P2 while its return on equity ratio improved to 9.2 percent from 7.2 percent and a return on assets to 2.11 percent from 1.73 percent.

Capital-to-risk ratio was registered at 31 percent.

To reach a targeted 20-percent return on equity, the bank plans to reduce break-even points on all bank business by aligning operating expenses to short-term revenue potential, scaling down capital investments to cover projects, and short paybacks to free cashflow to acquire earning assets.

"We are concentrating on six areas that gives us the most attractive growth and return on equity. These are: Project Delta, corporate cash management, credit cards, low-cost deposit generation, corporate workplace arrangements, and treasury positioning," Ortiz outlined.

Project Delta is designed to reduce business costs while improving productivity. It has in fact reduced rental expenses by P25 million per year involving 40 branches. Its entire board has undergone seminars on good corporate governance while its anti-money laundering policy has been put in place.

"We acquired 112,000 new customers during the year through EON cyber account, First Union Plans products, Unionbank Visa card, BusinessBanking products, and cash management," the bank chairman reported.

The bank has also increased business arrangements with the Bureau of Internal Revenue (BIR), Bureau of Customs (BOC), and the Securities and Exchange Commission (SEC) for their electronic filing and payment systems in support of e-government initiatives.

Recently, Unionbank has initiated possible joint venture agreements with three property developers in its bid to liquidate or liquefy its bad assets. The properties, worth roughly P1.2 billion, are located in Metro Manila and other areas immediately outside Metro Manila. – TPT