Unionbank profits improve to P12.6 B

Published January 31, 2022, 3:14 PM

by James A. Loyola

Union Bank of the Philippines reported a 9 percent improvement in net income to P12.6 billion in 2021, translating to above-industry return on equity of 12.0 percent.

In a disclosure to the Philippine Stock Exchange, the bank said its net revenues were at an all-time high of P45.1 billion, up 7 percent year-on-year (YoY).

UnionBank Philippines

Net interest income grew 4 percent to P29.8 billion due to sustained increase in net interest margins (up 9bps to 4.6 percent). Lower funding costs from the record increase in CASA (Current Account Savings Accounts) deposits supported margin growth.

Non-interest income also rose 14 percent to P15.3 billion. This was driven by higher fees, service charges, as well as FX gains, and trading income.

Loan loss provisions were 31 percent lower than the same period last year at P5.8 billion as credit risk stabilized compared to 2020. The Bank’s NPL ratio was at 5.0 percent compared to 5.1 percent in 2020.

As of end-2021, total assets were at P831.1 billion, 7 percent higher than at the end of 2020. Total loans and receivables were at P359.8 billion, up 6 percent YoY.

Total deposits were higher by 8 percent to P570.5 billion primarily driven by the record growth of CASA deposits at 32 percent to P341.0 billion.

“Our performance in 2021 gives us a good foundation for further growth in 2022. We expect a healthy expansion in our loan portfolio, steady margins from strong CASA growth, improving credit quality, and higher revenues across our business groups this year,” said Unionbank Senior Executive Vice President Jose Emmanuel U. Hilado.

UnionBank President and CEO Edwin Bautista

Unionbank President Edwin R. Bautista said “Our 2021 performance was a validation of our digital transformation strategy. We hit key strategic milestones that ramped up our growth aspirations.”

“Customer accounts grew by 2.5 million this year, with close to 1 million accounts coming from our digital-only account opening offering. CASA growth was at an all-time high for the second consecutive year, owing to our cash management solutions,” he added.

Bautista noted that, “UBX hit an inflection point with its E-Commerce platforms, with transactions breaching the 1 million-mark in the month of December alone. Our digital bank, UnionDigital is also on track for commercial launch by middle of this year.”

“Together with our digital initiatives, our top priority in 2022 is the smooth transition and migration of Citi’s consumer banking business. We are committed to uphold Citi’s superior customer experience and provide a new home for all Citi employees in UnionBank,” he said.