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Manila Bulletin devider Business devider Banking & Finance devider UnionBank's Q1 profit surges 167% despite market volatility

UnionBank's Q1 profit surges 167% despite market volatility

Published Apr 27, 2026 03:45 pm
Manuel R. Lozano
Manuel R. Lozano

Aboitiz-led Union Bank of the Philippines (UnionBank) reported a 167-percent surge in net income to ₱3.8 billion in the first quarter of 2026 despite some trading losses arising from market volatility associated with the Iran conflict.

The bank noted that it continued the momentum that started in the second half of last year, during which it began a significant earnings uptrend. Quarter-on-quarter, net income grew by 8.7 percent.

“We are carrying over strong momentum, building on the actions we took in 2025 to strengthen our balance sheet and lay the foundation for sustainable growth,” said UnionBank Chief Financial Officer (CFO) Manuel R. Lozano.

He noted that, “First-quarter results provide an early indication that the bank is continuing its path to improved performance. However, recent geopolitical developments introduced potential risks. In response, we took proactive measures to reinforce our portfolio and enhance credit risk management.”

The bank’s immediate focus is to ensure it effectively navigates the impact of recent developments, but Lozano stressed that it is strongly positioned in terms of capital and liquidity and remains focused on protecting earnings to maintain its good performance despite heightened market volatility.

“This puts the bank on a sustainable path towards its goal to deliver improved profitability, driven by core recurring income,” UnionBank said.

Net revenues reached ₱21.7 billion, up 11.8 percent year-on-year, driven by the solid performance of core business drivers.

Total customers rose to 18.9 million, up 7.6 percent year-on-year. This provides a broader base to support lending and to further enable cross-sell and upsell.

Net interest income grew to ₱16.8 billion, driven by loan growth. Institutional loans also expanded, increasing by 11.5 percent to ₱223.7 billion.

Consumer lending, which made up 60 percent of the bank’s total loan portfolio, remained strong, particularly in unsecured products, which grew 19.2 percent to ₱153.1 billion.

Net interest margin (NIM) increased by 34 basis points (bps) to 6.7 percent, supported by current and savings accounts (CASA) growth of 7.8 percent. Growth in CASA was driven by the continued deepening of transaction banking relationships established in 2025.

Fee income remained stable, with a fee income-to-assets ratio of 1.3 percent, more than twice the industry average. Growth continues to be driven by higher digital transaction volumes, alongside increased contributions from wealth management and bancassurance.

Credit costs declined by 17.9 percent year-on-year to ₱4.5 billion and improved by 19.1 percent quarter-on-quarter. Asset quality strengthened as portfolios continued to season, particularly in the unsecured segment.

Key subsidiaries also demonstrated improvements, supported by lower credit costs after addressing legacy credit exposures in 2025 and further enhancements in risk controls. - James A. Loyola

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