MANILA, Philippines - The Union Bank of the Philippines (UnionBank) is targeting loan growth this year of at least 15 percent, carried by increased emphasis on consumer lending and maximized branch operations.
According to UnionBank president and chief operating officer Victor B. Valdepenas, emphasis would be on the consumer market, particularly in the auto and mortgage markets which have been growing by a combined 35 percent.
Corporate lending has slowed down as it has been tapping the equity markets as well as the capital market, going directly to the market to raise funds.
“So we have to enhance our consumer lending,” Valdepenas added.
Aside from increasing its deposit base, the universal bank of the Aboitiz Group will be increasing profits from fee-based activities, and empowering its branches further to reach out to small and medium enterprises.
“We have given our branch personnel more leeway to go out to the market, especially the small businesses,” Valdepenas said.
UnionBank has a business line that is tailor – fit for the SME market. It would reduce operating inefficiencies, increase savings for the bank client, and increase the operating relationships between the bank and its client base.
“We will enhance our cash management services particularly for the SME sector beyond the deposit-taking activities. It will result in increased fee-based earnings from floats and other payables.
Last year, UnionBank opened 11 new branches, while consolidating branching operations. “We will open another seven this year,” he added.
It reported a net income of P6.59 billion in 2011, up 24.3 percent from the 2010 income figure of P5.3 billion. “We will duplicate if not surpass this year our previous performance,” Valdepenas added.
In the first three months of 2012, the bank’s net earnings reportedly grew 285 percent to P1.2 billion.
Net interest income was slightly up to P1.8 billion while total interest income amounted to P2.9 billion on generally lower average yields of earning assets and drop in average levels of due from other banks.
Earlier, UnionBank chairman and chief executive officer Justo A. Ortiz said that while trading and fixed income securities has been its source of consistent profits, it was looking to increase the share of consumer-based sources of profits.
“In the next 10 years, we would like to balance trading securities profits by generating more customer-based activities such as consumer lending as well as SMEs,” Ortiz added.
In 2011, trading gains ballooned to P5.4 billion nearly double the P2.8 billion in 2010. Service charges, fees and commission also expanded 25 percent to P846 million in 2011 from P682 million.