Union Bank net income up 15.5% to P2.9B in 2007

The Aboitiz-controlled Union Bank of the Philippines (UBP) posted a 15.54 percent growth in its net income last year to P2.9 billion from P2.51 billion in 2006, the bank said in a statement.

It said its asset base also grew to P187.99 billion last year from P183.19 billion recorded in 2006 as its capital base rose 32.46 percent to P26.36 billion from P19.9 billion due to strong internal capital generation and proceeds from the follow-on equity offering in the first half of the year.

Thus, its capital adequacy ratio (CAR) remained at a healthy 16.44 percent, inclusive of credit, market and operational risk charges, UBP said.

Revenues across businesses improved 13.02 percent to P8.42 billion from P7.45 billion while gross interest income on loans grew 8.71 percent to P3.62 billion. Service charges, fees and commissions stood at P850 million, 18.06 percent more than the P720 million in 2006.

Meanwhile, its loan portfolio stood at P44.01 billion while deposits slipped slightly by 8.6 percent to P106.76 billion last year from the P116 billion reported in 2006. 

The bank’s non-performing loans (NPL) ratio, however, improved to 3.6 percent in 2007 from 4.9 in 2006 partly as a result of the sale of P2-billion worth of bad loans. UBP also sold P282-million worth of real and other properties acquired (ROPA).

UBP operates 166 branches, 186 onsite and offsite ATMs, a call center and an Internet bank, www.unionbankph.com. The bank aims to rank among the top five commercial banks in the country in terms of size by 2010. 

The commercial bank said it will remain active in the acquisition market with emphasis on banks that have a strong middle market and consumer portfolio.

In 2005, it acquired mid-sized commercial bank International Exchange Bank (iBank); adopting the latter’s technological maturity that resulted in savings of P700 million.

In its strategic plan, UBP said its expansion will be on the corporate and middle market loan base as well as consumer financing. It will also adopt a trust platform mainly from the expertise acquired from iBank.