Asia United Bank (AUB) of the Ng family reported that it sustained record-setting profitability in the first six months of the year due to higher revenues and improved credit quality.
In a disclosure to the Philippine Stock Exchange (PSE), the bank said it posted a 27 percent year-on-year growth in consolidated net income to P5.2 billion, equivalent to a return on equity of 21.9 percent and a return on assets of 3.1 percent.
Net interest margin widened by 10 percent to P8.2 billion as interest income from its loan portfolio and investment activities rose. This resulted in a net interest margin ratio of 5.4 percent from the previous year’s five percent.
“Thanks to the improving business environment, AUB continues to deliver consistent performance in the first half of the year,” said AUB President Manuel A. Gomez.
He noted, “to remain a ‘challenger bank’ among the country’s top listed universal banks, we must become the ‘Digital Partner of Choice,’ advocating for open collaboration and helping others share in our success and responsibility to deliver financial inclusion.”
Through its digital partnerships, AUB has enabled merchants to accept digital payments from their customers using its all-in-one digital payment acceptance product, AUB PayMate, and revolutionized cross-border digital payments through its HelloMoney e-wallet, among other things.
In the first half, AUB’s operating expenses increased by seven percent to P3.3 billion, mainly due to higher compensation, capital expenditures, and investments in further business growth.
Despite the increase, the bank continues to show operational efficiency, with a cost-to-income ratio of 33.5 percent.
The bank’s higher profitability was also largely due to improved asset quality, as shown in its 0.43 percent nonperforming loans (NPL) ratio, which was lower than the previous year’s 0.9 percent.
This led to a 92 percent decline in loan loss provision to P78 million from P952 million previously. The bank remains sufficiently covered from probable losses with an NPL coverage ratio of 150.8 percent from 114.8 percent a year ago.
AUB’s total assets stood at P349 billion, up six percent from the same period last year. Its total loan portfolio at P187.9 billion is sufficiently funded by P281.1 billion in deposits, with a loan-to- deposit ratio at 66.8 percent.
Low-cost deposits (current account/savings account) remain the primary source of funding for AUB, comprising 75 percent of total deposits, an improvement from previous year’s 72 percent.
Total equity increased 18 percent to P51.6 billion from retained earnings. Indicative Common Equity Tier 1 Ratio was at 17.8 percent and its Capital Adequacy Ratio was at 18.6 percent, both above the regulatory minimum.