Tuesday, June 17, 2008 Bank’s Q1 net income hits P602.5 million
UNIONBANK of the Philippines posted a net income of P602.5 million in the first quarter of this year, showing better performance in net interest income and operational costs.
While lower than the P1.63-billion net income for the same period the previous year, which was boosted by exceptional trading gains, increased lending business resulting from more aggressive credit positioning raised net interest income by 21.64 percent to P1.25 billion and efficient operational management reduced operating costs by 7.82 percent to P1.21 billion.
Net loan portfolio expanded by about 18 percent to P46.9 billion on the back of solid expansion in corporate, commercial and consumer finance business.
“Our strategy of seeking appropriate risk-adjusted return is paying off in this volatile environment and we will continue to optimize the value of business opportunities to the quality and growth of our profitability,” said Justo A. Ortiz, chairman and chief executive officer of Unionbank.
The 21.6-percent expansion in net interest income was mainly attributable to growth of about seven percent in interest income from lending and 37.57-percent rise in interest income from securities, on the one hand, and to 35.66-percent drop in interest expense on deposits and bills payable due to the reduction in deposit cost and funding requirements, on the other hand.
Strategy
The bank’s total operating income amounted to almost P2 billion in the first quarter of 2008, nearly 40 percent lower than last year’s P3 billion, reflecting Unionbank’s deliberate strategy to mitigate the downside implications of negative market environment through more calibrated engagement in the capital market and the base effect arising from one-off gains from non-recurring transactions in the previous year.
Total operating expenses amounted to P1.2 billion, 7.82 percent lower than the P1.3 billion for the same period last year due to sustained improvements in productivity and cost management.
“We will take our already very good cost management system further while increasing the robustness and durability of our earnings stream this year”, said Victor B. Valdepeñas, president and chief operating officer of Unionbank.
Unionbank’s asset base stood at a little over P160 billion in the first quarter of this year. Deposit level was almost P108 billion. (PR)
