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By Maricel E. Burgonio, Reporter
UNION Bank of the Philippines said its profit
plunged in the first quarter of the year, as trading gains went down
due to a strong peso.
In a statement, Union Bank said its net
income reached P602.49 million in the first three months this year,
170 percent lower compared with P1.91 billion in the same period
last year.
This was despite a 21.64-percent increase in
interest income at P1.25 billion and a 7.82-percent decline in
operating costs to P1.21 billion.
The increase in interest income was due to
improved lending business resulting from the lender’s aggressive
credit positioning.
“We will take our already very good cost
management system yet further while increasing the robustness and
durability of our earnings stream this year,” Victor Valdepeñas,
the bank’s president and chief operating officer said.
Valdepenas said interest income from lending
grew 6.94 percent while interest expense on deposits and bills
payable dropped by 35.66 percent due to the reduction in deposit
cost and funding requirements.
The bank’s loan portfolio grew by 18.07
percent to P46.90 billion on the back of expansion in its corporate,
commercial and consumer finance business.
A strong peso however pulled the bank’s
trading gains. The local currency currently trades around 42 to the
dollar, having peaked at 40.51 in February. It appreciated 18
percent against the greenback last year, making the peso one of
Asia’s best performing currencies.
Total operating income amounted to P1.91
billion, 39.10 percent lower than the P3.14 billion for the same
period last year.
Total operating expenses amounted to P1.21
billion, 7.8 percent lower than the P1.32 billion previously due to
sustained improvements in productivity and cost management, Union
Bank said.
The lender said its asset base stood at P160.13
billion in the first quarter, while its deposit level stood at
P107.72 billion.
Strong internal capital generation and proceeds
from the follow-on equity offering expanded the bank’s capital
base by 23.94 percent to P26.47 billion in the first quarter this
year from P21.36 billion in the same period last year.
The bank’s capital adequacy ratio stood at
14.6 percent—inclusive of credit, market and operational risk
charges.
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