MANILA, Philippines - Aboitiz-led Union Bank of the Philippines plans to sustain its financial growth this year by focusing on its recurring income business, a company official said.
In a press briefing Friday, Union Bank president and chief operating officer Edwin Bautista said the company is looking to grow at the same pace as in the past two years.
“We need to continue to grow at the same pace. Basically, to grow our assets at around the same pace and where exactly do we do that,” Bautista said.
“If we are able to achieve that, then we are able to continue our growth,” he added.
Union Bank reported a 67 percent rise in its net income to P10.1 billion last year from P6 billion in 2015 due to the robust performance of all its business segments.
In the first three months of 2017, the bank continued its strong growth as it posted a 37.2 percent hike in net income to P2.21 billion from P1.61 billion in the same period last year.
Bautista said growth will be driven by the bank’s strategy of focusing on its recurring income business, which it pursued in the last few years.
“We decided to go for a business model that depends on recurring income and profitable revenues,” Bautista said. “We focused to grow our loan growth across all the business segments from corporate, and commercial to consumers.”
The bank’s recurring income (net interest income and fees) continues to grow, increasing 21 percent and 13 percent in 2016 and 2015, respectively. It also accounted for 75.9 percent of the bank’s total operating income in 2016.
“Customers loans grew 31 percent and 29 percent in 2016 and 2015, respectively, while low-cost deposits area at a minimum or 1/3 of total deposits,” the bank said.
Union Bank earlier said it is allotting P3 billion for capital expenditures for this year, triple the size of its average budget of P1 billion budget in the past years, as it transforms into a new business model.