UBP first quarter 2022 net income reaches P2.6 billion

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UNIONBANK of the Philippines (UBP) posted a net income of P2.6 billion in the first quarter of 2022, which translated to a return on equity of 9.2 percent, the bank said in a statement.

UBP’s recurring income grew 21 percent versus the same period last year as net interest income
increased by 12 percent to P8.1 billion and fee-based income more than doubled to P1.4 billion. Net
Income, however, was lower by 45 percent due to extraordinary trading gains recorded in the first quarter of last year.

The year-on-year (YoY) growth in recurring income was attributable to: 1) Net interest margin improved by 6bps to 4.6 percent brought about by higher yields in earning assets, coupled by lower cost of funds from the expansion of the bank’s CASA deposits; and 2) Fee-based income came from the growth of InstaPay charges and interchange fees. Higher foreign exchange income (up 53 percent YoY to P369.5 million) also boosted UBP’s topline revenues.

Versus the fourth quarter of 2021, UBP’s net income grew 40 percent mainly due to lower provisions for credit losses. As of end-March 2022, total assets were at P844.4 billion, 13-percent higher than the same period last year. Total loans and receivables were at P351.8 billion, up 2 percent YoY. Total deposits were higher by 15 percent to P577.2 billion primarily driven by the sustained growth of CASA deposits at 28 percent to P356.5 billion.

The optimism generated by the reopening of the economy is palpable and if the pandemic is behind us, we are hopeful that the economic gains since 2021 are sustainable. While the ongoing Russia-Ukraine conflict could adversely affect investor and consumer sentiment, we think that the country’s economic fundamentals are strong enough to weather the challenges ahead. We, therefore, remain optimistic that improving credit appetite and spending patterns will allow us to sustain momentum in our recurring income for the rest of 2022,” said Jose Emmanuel Hilado, Treasurer and Corporate Planning Services Head.

I am happy to report that we are on track to achieve the strategic milestones that we have set for the year. For the acquisition of Citi’s consumer business, we have already obtained approvals from the Philippine Competition Commission and Insurance Commission. Our Stock Rights Offering, which will fund the acquisition, is already in motion and expected to conclude in May 2022. We remain confident to become the legal owner of the consumer portfolio by July 2022. Moreover, our digital bank UnionDigital, is also on-track to launch by the 2nd half of the year. We are closely working with the regulators to complete key requirements for the start of our operations,” said Edwin Bautista, President and Chief Executive Officer.

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