Asia United Bank (AUB) again posted record-setting profits in the first three months of the year as consolidated net income increased by 16 percent to P2.3 billion compared to the same period last year.

In a disclosure to the Philippine Stock Exchange, the bank said this translates to a return on equity (ROE) of 20 percent, the highest in the bank’s 27-year history. It also registered a return on assets (ROA) of 2.8 percent, the highest since AUB’s initial public offering in 2013.

Based on unaudited financial results, AUB said this was attributable to higher net interest margin (NIM) and lower loan loss provisions.

“We aim to deliver consistent performance throughout 2024, so we can remain as a ‘challenger bank’ among the country’s top listed universal banks,” said AUB President Manuel A. Gomez. 

He noted that, “With interest rates expected to remain elevated throughout the year, and global shocks a continuing concern, we will remain agile to sustain our performance.”

Amidst the environment of rising interest rates, AUB’s net interest margin rose 10 percent to P4 billion due to revenue growth from the bank’s loan portfolio and investment activities. This resulted in a NIM ratio of 5.2 percent from the previous year’s 4.8 percent.

Operating expenses for the first quarter grew 12 percent due to higher compensation, capital expenditures, and business growth-related expenses. Despite the increase, AUB has maintained its operational efficiency, as it continued to shift to digital platforms and automation.

Asset quality continues to improve with a nonperforming loans (NPL) ratio of 0.47 percent from the previous year’s 1.0 percent. This led to an 89 percent drop in loan loss provision to P78 million than previous year’s P709.2 million. 

The bank remains sufficiently covered from probable losses with NPL coverage ratio at 116.7 percent versus the previous year’s 113.0 percent.

Total assets stood at P346.7 billion, up 6 percent from the same period last year. Total loan portfolio was at P188.3 billion, sufficiently funded by P283.3 billion in deposits and with loan-to-deposit ratio at a healthy 66.5 percent. 

The bank’s low-cost deposit CASA remains the primary source of funding, comprising 73 percent of total deposits.

Total equity increased 18 percent to P50.7 billion from retained earnings. It has an indicative Common Equity Tier 1 Ratio of 17.55 percent and a Capital Adequacy Ratio of 18.29 percent, both above regulatory requirements.

In December 2023, AUB paid 50 percent stock dividend and special cash dividend of P0.33 per share. Prior to the stock dividend payment, it has already paid out P2 per share in two tranches (P1 each in July and in September 2023).