Union Bank net income up 58% to P4.05B in January-September

The Aboitiz controlled Union Bank of the Philippines reported a 57.86 percent increase in net earnings in the first nine months of 2007 to P4.05 billion, from P2.568 billion in the same period last year.

In a statement, the bank said net interest income, gains from trading and investment securities as well as interest income from loans and receivables were the growth drivers during the period.

Net interest income expanded nearly 43 percent from P2.687 billion to P3.842 billion as of the end of the third quarter of the year.

Trading and investment securities gains went up to P1.209 billion from P1.069 billion in 2006 while service charges, fees and commission widened to P634.699 million this year from P550.734 million in 2006.

Interest income on loans and receivables also registered a good performance, hitting P2.735 billion from P2.18 billion, to offset the contraction in its trading and investment securities to P1.78 billion from P2.15 billion in 2006.

Other operating income rose to P1.133 billion from merely P471.634 million in the same period the past year.

The appreciation of the peso versus the dollar has taken its toll on the net interest income of the bank. Profits from foreign exchange narrowed sharply from a high of P224.648 million in 2006 to just P23.339 million this year.

Meanwhile, total operating expenses went up by P796 million or 25.51 percent from P3.121 billion to P3.916 billion. The uptick was brought about by the hike in its compensation and fringe benefits, growing to P1.33 billion from P1.087 billion, due to the expanded employee’s base with the absorption of the International Exchange Bank (iBank) workforce and the retirement of some officers and staff.

Union Bank acquired the medium-sized iBank in 2005, lifting its ranking to ninth place among the top lenders in the country.