Loss provisions slash AUB income to P852 M in H1

MANILA, Philippines - Earnings of Asia Unit Bank (AUB) fell by a little over three percent in the first half, largely due to higher operating expenses with the opening of more branches and higher loan provisioning.

 Based on its financial report submitted to the Philippine Stock Exchange, AUB booked a net income of P852.76 million from January to June or P26.78 million lower than the P879.54 million registered in the same period last year.

The bank’s interest income grew 20 percent to P2.82 billion while interest expense grew 30 percent to P600 million.

AUB managed to buck the continuous decline in domestic interest rates and the squeeze on loan margins.

 Interest earnings from loans and receivables jumped 46.6 percent to P2.14 billion but interest income from trading and investment securities declined 30.4 percent to P577.54 million.

AUB president Abraham Co said the 50 percent growth in commercial loans and 28 percent rise in consumer loans propelled the growth of interest income in the first semester.

“This is in line with the bank’s goal of having a stronger presence in the consumer loan segment through its branches and online delivery channels,” Co said.

 The robust loan portfolio led to a 16.6 percent expansion in total assets to P131.4 billion as of end-June 2015. Total deposit base went up by 21.4 percent to P100.7 billion.

 Operating expenses increased by 27.6 percent to P2.1 billion.

The bank’s provision for credit and impairment losses more than doubled to P244.56 million from only P101.81 million a year ago.

 During the six-month period, AUB opened 29 branches, bringing its total network to 224 which include 15 branches of Cavite United Rural Bank and Pampanga-based Rural Bank of Angeles.

 In addition to growing its branch network to reach out to more customers nationwide, AUB is aggressively addressing the digital divide among customers by coming up with innovation-driven services.

“We are confident that our investments in our people, products, and processes will transform AUB into becoming a formidable player in the Philippine banking arena,” AUB chief transformation officer Jacob Ng said.