UnionBank sets P10 billion rights offer, earns 33% more in Q1

MANILA, Philippines — Aboitiz-led UnionBank of the Philippines is raising P10 billion from the sale of new shares to existing shareholders to preserve its assets growth as its net income jumped 33 percent in the first quarter.

In a disclosure to the Philippine Stock Exchange (PSE), UnionBank said its board of directors approved to raise additional capital of up to P10 billion through a stock rights offering (SRO).

The fund raising activity is aimed at increasing the capital adequacy and common equity tier-1 ratios.

“The proceeds from the stock rights offer will be used to allow for continued growth of assets of the bank,” UnionBank said.

Edwin Bautista, president and CEO of UnionBank, said the bank’s net income grew by 33 percent to P2.9 billion in the first quarter from P2.2 billion in the same quarter last year.

“We started the year strong. Our solid profitability results are quite timely as it allows us to fast-track our investments in digital transformation. We made it clear at the start of the year that we will invest in blockchain technology for our internal operations and the inevitable internet of finance,” Bautista said.

These results were behind robust net revenue growth of 21.5 percent to P6.9 billion. The strong earnings resulted in an annualized return on equity and return on average assets of 15.9 percent and two percent, respectively.

Importantly, UnionBank continues to sustain double-digit growth in terms of customer businesses as total loans jumped by 15.9 percent to P293.1 billion with consumer loans accounting for 34 percent of total loan portfolio.

UnionBank’s total assets grew by 17.3 percent to P608.4 billion as deposits reached P439.6 billion with current and savings account (CASA) accounting for more than one-third of total deposits.

Asset growth was also supported by the successful $500 million medium term notes issuance last November.

“Given our positive earnings performance in the first quarter, we are confident that we can attain our full-year target. We recognized gains from our investment portfolio following the adoption of the new PFRS 9 accounting standards. We expect earnings in the succeeding quarters to once again come from recurring income as we continue to grow our balance sheet,” UnionBank treasurer and chief finance officer Jose Emmanuel Hilado said.