UnionBank posts record P10.1B full-yr net income

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Forges bancassurance partnership with Insular Life

ABOITIZ family-led Union Bank of the Philippines (UnionBank) reported a record net income of P10.1 billion in 2016, up 67 percent from the previous year’s P6 billion, driven by strong organic growth and a tax-exempt profit boost in the second half of last year.

In a disclosure to the Philippine Stock Exchange (PSE) on Monday, UnionBank said its earnings performance last year translates to a return on equity (ROE) of 16.9 percent.

The bank’s net interest income—or income from interest on loans and deposits—rose 22 percent to P14.8 billion last year while non-interest fee-based income grew 19 percent to P4.4 billion.


Total loans increased 31 percent year-on-year to P235.4 billion, bringing the bank’s total assets to the half-trillion mark to close the year at P524.4 billion.

Total deposits expanded by 21 percent to P376.5 billion, with low-cost checking and savings accounts (CASA) rising by 18 percent.

As a result of the higher loans and deposits, recurring revenues increased 21 percent to P19.2 billion.

“We are very pleased with our collective results. All of our major business segments contributed significantly to the bottom-line. More importantly, we were able to scale up our recurring revenue base, while making substantial headway in our journey towards digital transformation,” Edwin R. Bautista, UnionBank president and chief operating officer, said in a statement.

Bancassurance partnership

The bank also announced on Monday its bancassurance partnership with Insular Life Assurance Company Ltd., which authorizes the UnionBank group to sell and distribute Insular Life’s insurance products.

UnionBank, together with its thrift bank arm City Savings Bank, signed a distribution agreement with Insular Life last Friday allowing their customers in more than 300 branches to avail of Insular Life products. The deal is still subject to regulatory approvals.

Founded in 1910, Insular Life is the first and leading Filipino life insurance company.

“I am therefore delighted that we are finally completing our product suite, and even more thrilled that we are signing with a company that has a long history of being our partner. We see this partnership enduring for decades,” Bautista said in a separate statement.

For her part, Insular Life Chief Executive Officer Nina D. Aguas said the bancassurance deal with the UnionBank group is the right fit and is seen to “impact Filipino families and communities in a profound way.”

UnionBank is currently implementing its 2020 expansion plan, which seeks to grow its presence in the digital space through online and mobile platforms and expand its branch network by 10 percent each year.

Union Bank is the banking arm of the Aboitiz family under holding firm Aboitiz Equity Ventures Inc., which also has interests in power distribution, power generation and retail electricity supply (Aboitiz Power Corp.); food manufacturing (Pilmico Foods Corp.); and real estate (Aboitiz Land Inc.).

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