UnionBank optimistic of strong profit growth

MANILA, Philippines — Aboitiz-led UnionBank of the Philippines is optimistic it could sustain its record performance last year on the back of the robust core business.

UnionBank president and COO Edwin Bautista said the listed bank’s core profit would continue to grow significantly this year.

“This year, the core income will continue to grow significantly although we don’t know what will happen to the trading income. Without the trading income, maybe more than 50 percent growth definitely,” he said.

The net income of UnionBank jumped 67.4 percent to an all-time high of P10.06 billion last year from P6 billion in 2015 as the strong growth across retail, commercial and corporate business segments boosted its loan book.

Last year, we made about P10 billion and the growth rate was about 67 percent. Obviously last year was an exception,” Bautista said.

“Our core business will continue to grow. There were trading gains last year but we cannot always rely on it to happen again this year,” he said.

UnionBank expects its lending business to grow between 25 and 30 percent this year, according to Bautista. “The last two years was really driven by loan growth,” he said.

Bautista said the bank is looking at raising the share of retail and consumer clients to 70 percent from the current 50 percent.

The bank is spending P3 billion for its capital expenditures this year, triple the annual average budget of P1 billion, as it beefs up its information technology capability.

“Digitization is something that we need to do. We want to do it now that the business is very strong. We don’t really want to do it if we are forced to do it because by that time we will already be in a panic mode,” he said.

Bautista said UnionBank’s corporate segment has been strengthened because of digitization.

UnionBank is looking at raising P20 billion from the issuance of long-term negotiable certificates of deposits (LTNCDs) as well as $1 billion from a euro medium term note program.

Bautista said it remains open to a possible acquisition in order to add value to its network and its product range.

“If we are looking for an acquisition, it must add value to our network or to our product range or to a new customer segment that we are going after. It is opportunistic. It depends on what is available,” he said.