Aboitiz-led Unionbank of the Philippines is optimistic of surpassing its earnings last year, even after reporting a 30 percent drop in net income to ₱1.4 billion in the first quarter of 2025 from the ₱2 billion earned in the same period last year.

In a disclosure to the Philippine Stock Exchange, the bank said this is due to the impact of one-time, tax-related write-offs from a subsidiary and front-loaded non-recurring costs, although Unionbank’s strong topline performance absorbed part of it.

The bank generated ₱19.4 billion in revenues in the first quarter, translating to a year-on-year growth of 8.4 percent, still driven by a growing consumer business, expanding net interest margin, and increasing fee-based revenues.

“The underlying drivers of our financial performance remain solid. We continue to see substantial new client acquisitions month-on-month as well as expansion of our net interest margin and fee-based income. These indicate that the strong revenue trend will be sustained,” said Unionbank Chief Financial Officer Manuel R. Lozano. 

He added that, “if we normalize for the impact of one-offs, our net income would be comparable to prior quarters. Moving forward, we expect performance to get back to this trajectory, and we remain confident that we will exceed our 2024 performance.”

Consumer loans account for 62 percent of the total loan portfolio, nearly three times higher than the industry average. This is attributed to a diversified strategy with credit cards, personal loans, and teachers’ loans exhibiting the fastest growth. 

“The Bank’s retail client base is now at 17.6 million, providing a solid foundation for growth in the future,” Unionbank said.

Net interest margin improved by 69 basis points to 6.3 percent on the back of higher-margin consumer loans and lower funding costs. For the latter, the Bank benefitted from the continuous growth of its low-cost deposits and easing monetary conditions. 

Furthermore, fee-based income grew 21.3 percent to ₱3.7 billion as the larger customer base resulted in higher transactions. Fees-to-assets increased to 1.3 percent from 1.1 percent previously — one of the highest in the industry.