Aboitiz-led Union Bank of the Philippines (UnionBank) registered a six percent hike in net income to P8.6 billion for the first nine months of 2024 from P8.1 billion in the same period last year. 

In a disclosure to the Philippine Stock Exchange (PSE), the bank said that for the third quarter of 2024 alone, net income was at P3.5 billion, an increase of 76 percent versus the same quarter in 2023, and 14 percent higher than the second quarter this year.

The bank has recorded net revenues of P57.7 billion for the first nine months of 2024, which is 9.2 percent higher than the P52.8 billion recorded in the same period last year. 

The improvement in performance is mainly attributable to the expanding parent bank’s consumer portfolio.

“The bank efficiently allocated its capital to expand its consumer lending activities, which was evident in our record-high net revenues,” said UnionBank Chief Executive Officer Edwin Bautista. 

He added that “the leading indicators brought about by our growing retail customers are very promising. Our new-to-bank credit card customers per month are averaging 2.5 times higher than last year."

“The active users of our digital channels have increased to 5.6 million from 4.7 million last year. Consequently, we have seen digital fund transfer transactions growing by 40 percent year-on-year. These customer metrics are the ones driving revenues today and onto the future,” he also said.

Net interest income grew by 14.2 percent to P42.6 billion as net interest margin improved by 58 bps year-on-year. The bank’s net interest margin is among the highest in the industry at 5.9 percent. 

“The large proportion of our consumer portfolio is reflected in the continuous improvement of the bank’s net interest margin,” said UnionBank Chief Financial Officer Manuel Lozano. 

He noted that “with the improving macroeconomic backdrop and expectations of declining interest rates, there is still room for further margin expansion. We should be able to reprice our funding cost downwards, while sustaining the high yields coming from our consumer business.”

Moreover, the bank’s ability to generate fee-income as a proportion to its assets is at one percent. This is more than double the Philippine banking industry’s average. 

Notably, consumer loans now account for 60 percent of its total loan portfolio, which is nearly three times higher than the industry average.

The bank’s operating expenses stood at P33 billion as IT-related expenses went down by 17.3 percent from the first nine months of 2023. 

The downward trend in IT expenses started when we concluded the integration of the acquired Citi consumer business earlier this year. 

The bank continued to invest on customer acquisition, service delivery, and client engagement to maintain its strong momentum in the growth of its consumer business. 

This has resulted in the strong growth in its customer base, which is now over 15 million as of September 2024. This includes close to 500,000 new credit card clients this year. 

Total assets as of September 2024 ended at P1.1 trillion. Total loans and receivables reached P523.2 billion while low-cost CASA deposits stood at P419.4 billion.