AUB earnings soar in 1st half

MANILA, Philippines — Rebisco-led Asia United Bank (AUB) is optimistic of beating its pre-COVID pandemic financial performance as earnings soared by 50 percent to P2.9 billion in the first half from P1.9 billion in the same period last year. 

The listed bank and its subsidiaries attributed the strong performance in the first semester to higher total operating income and lower provision for credit and impairment losses. 

“We remain on track with our target to return to our pre-pandemic net income performance of P4.4 billion, especially as the economy gradually reopens,” AUB president Manuel Gomez said. 

The earnings translated to a return on assets of 1.8 percent and a return on equity of 15.8 percent from a year-ago level of 1.2 percent and 11 percent, respectively. 

“We are pleased to note that these profitability ratios are among the highest, if not the best, in the industry as far as published reports of other publicly listed banks go,” Gomez said. 

The group’s total operating income increased by 12 percent to P6.9 billion as of June 30 from P6.1 billion a year ago, boosted by higher net interest income and other operating income. 

Net interest income grew by eight percent to P5.8 billion from P5.4 billion in same period last year due to an increase in interest income and lower interest expense. 

Interest income from loans and receivables remained flattish at P5 billion, while interest income from trading and investment securities grew by 56 percent, year-on-year.

 The group generated a P23-billion increase in low-cost current account and savings account (CASA) deposits that reached P222 billion, leading led to a CASA-to-total deposits ratio of 84 percent from 71 percent. 

Coupled with the retirement of high-cost deposits, this drove down the group’s interest expense by 20 percent to P742 million from P922 million during the first half of 2021. 

Improved trading and foreign exchange gains and an increase in transaction fee income led to a 42 percent rise in the group’s non-interest bearing income to P1.1 billion from P743 million. 

Likewise, better asset quality led to a further reduction in non-performing loan (NPL) ratio to 1.8 percent from two percent, paving the way to a 43 percent drop in provision for credit and impairment losses to P511 million from P897 million. 

Operational expenses remained flat at P2.7 billion. 

AUB is one of the top 20 banks in the Philippines with an asset size of P319.7 billion as of end-June this year.