Asia United Bank (AUB) reported a 41 percent jump in consolidated net income to a record P8.6 billion in the first nine months of the year from P6.1 billion in the same period of 2023 due to higher revenues and lower loan loss provisions.

In a disclosure to the Philippine Stock Exchange, the bank said its earnings for the period under review has surpassed its full-year net income of P8.3 billion in 2023. 

This translated to a return on equity of 22.4 percent and return on assets of 3.4 percent, both higher than the previous year’s 19.4 percent and 2.5 percent, respectively.

Net interest margin improved 11 percent to P12.5 billion due to an increase in interest income from its loan portfolio and investment activities. Its net interest margin ratio was up at 5.3 percent from the previous year’s 4.9 percent.

Non-interest income grew from improved foreign exchange gain, recovery income, and service charges and other fees from other operating activities such as credit cards, AUB PayMate, remittance, trust, and other branch-related transactions.

Operating expenses rose by  six percent to P5.0 billion during the first three quarters, largely because of higher staff compensation and capital expenditures as AUB focused on new business growth opportunities.

Credit and impairment losses fell 93 percent from P1.1 billion a year ago, as credit quality improved.

The bank posted a non-performing loans (NPL) ratio of 0.53 percent from the previous year’s 0.7 percent. It remains sufficiently covered from probable losses with an NPL coverage ratio of 120.7 percent versus the previous year’s 107.0 percent.

Total assets stood at P352.0 billion, up two percent from the same period last year. Its total loan portfolio grew six percent to P198.9 billion from P188.2 billion a year ago. 

This is sufficiently funded by deposits at P282.0 billion, with a loan-to-deposit ratio of 70.5 percent. The bank’s low-cost CASA deposits remained the primary source of funding, comprising 70 percent of total deposits versus the previous year’s 66 percent.

Total equity increased 25 percent to P56.6 billion from retained earnings. Its indicative Common Equity Tier 1 Ratio of 19.6 percent and Capital Adequacy Ratio of 20.4 percent are both above regulatory requirements.

“We expect our performance to remain robust, especially as we start reaping the full benefits of the government’s National ID system, with AUB being the first Philippine bank to integrate the Philippine Statistics Authority's eVerify. 

“This will hasten our account opening process and Know Your Customer (KYC) compliance, reduce paperwork, improve loan application and approval processes, and enhance security for financial transactions,” said AUB President Manuel A. Gomez.