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By Likha C. Cuevas-Miel, Reporter
UNIONBANK of the Philippines announced on Friday
that it expects its profit growth to ease due to the tougher
economic environment.
In a briefing, Victor Valdepeñas, UnionBank
president and chief operating officer, said the lender would be able
to top its P2.9-billion income last year, although growth would come
in at a slower 5 percent to 10 percent compared with last year’s
15.5-percent rise.
Based on its first quarter performance, the bank
would be able to achieve this forecast as its lending business may
expand by 10 percent to 15 percent by year-end, he said. At
end-March, the bank saw an increase in lending business as its net
interest income rose 21.64 percent to P1.25 billion while operating
costs were trimmed 7.82 percent to P1.21 billion.
Its net loan portfolio expanded by 18.07 percent
to P46.9 billion as corporate, commercial and consumer lending grew.
However, net income dropped from P1.63 billion to P602.49 million
year on year due to extraordinary gains booked in the first quarter
of 2007.
The environment now is fraught with several
dampening factors like skyrocketing oil and food prices and a
tighter credit environment abroad, Valdepenas said. “These are the
developments whereby it will create some cautiousness in terms of
our optimism but nonetheless we have factored this in and given the
fact that we got momentum in terms of our businesses we’re still
quite confident in meeting our [target] as far as 2008 is
concerned,” he said.
This year’s growth would come from consumer
lending as UnionBank has already positioned its credit card business
to take in more clients in addition to giving more access to
traditional borrowers, the bank president said.
He said the lender has made inroads in corporate
lending, “particularly in the strong build up in infrastructure
and utilities”. This is on top of expanding its new customer base
in the middle market, the main clients of iBank, which UnionBank
absorbed earlier.
“We also think there are opportunistic areas,
particularly in the area of treasury. While that is something you
cannot predict, but what we can see in the next three months would
offer also some opportunities. That of course is not a guarantee but
given our record, we try to make the most of that market
opportunity,” Valdepenas said.
The bank president said interest rates have
become volatile in the last few months and may continue to go up for
the rest of the year given the consensus that they have already
bottomed out. The peso may also hover between 43 and 45 against the
dollar in the next few months, making traders more cautious in
making their positions.
The market is also factoring in the US Federal
Reserve’s pronounce-ments that it will no longer cut interest
rates given the upside risks. This would prompt the Bangko Sentral
ng Pilipinas to “adjust very soon” its monetary policy position
since it “cannot divorce inflation” from nominal interest rates
because “at the end of the day inflation is the primary goal you
need to address,” Valdepenas said.
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