UCPB net income up 74%

MANILA, Philippines - The United Coconut Planters Bank (UCPB) is confident on surpassing its original net income target for 2010, with the bank’s outstanding performance in the first nine months of the year.

Net income after tax rose by 74 percent to P1.88 billion at the end of the third quarter of 2010 from P1.08 billion a year ago, as the bank grew interest income and non-interest income by double digits while cutting down interest expenses by similar double digits.

With still a full quarter to go, UCPB exceeded its full year income in 2009 of P1.66 billion and is on track to surpassing its profit target for this year of P2.2 billion.

UCPB executive vice president and chief finance officer Cesar Rubio said that the medium-sized commercial bank capitalized on the improving economic conditions and the tremendous goodwill created by its re-branding program to generate more deposits, loans and investments, and heighten trading operation.

Interest income in the first nine months of 2010 rose by 19 percent or nearly a billion pesos over the same period last year, from P4.88 billion to P5.79 billion, on the back of higher loan volume.

Non-interest income jumped by 36 percent or almost half a billion pesos, from P1.31 billion to P1.79 billion, on account of the huge increase in trading gains.

Rubio said UCPB took advantage of the rise in business and consumer confidence to expand commercial loans by a fourth and consumer loans by more than half, boosting its loan portfolio by 22 percent or P7.87 billion year-on- year, from P36.06 billion to P43.93 billion. 

Funding for the loan expansion came from deposits, which grew by six percent or P8.01 billion during the period, from P128.54 billion to P136.55 billion, as it leveraged the higher market visibility from its re-branding program to widen its depositor base.

“Likewise, the bank has been renovating its branches and relocating a number of them to better sites and bigger markets as part of this re-branding exercise. It has also replaced old ATMs with new models and opened more ATM sites,” Rubio said.

The bulk of the deposit growth came in the form of low-cost current account and savings account (CASA), which increased by almost three-fourths, enabling UCPB to reduce interest expense by 12 percent or more than a quarter of a billion pesos, from P2.22 billion to P1.96 billion.

With a bigger balance sheet going into the fourth quarter, Rubio said UCPB is well positioned to surpass its income target this year. The bank ended the third quarter with total assets of P166.45 billion and total capital of P14 billion.

UCPB launched last week a P3-billion long-term negotiable certificates of deposit (LTNCD) offering to further boost its deposit base and expand lending to the middle market and the consumer sector.

He said the bank is also expanding its delivery channels to sustain loan and deposit growth. It inaugurated four new branches and five ATM sites recently and will open one more branch and eight additional ATM sites to bring the network size to 183 branches and 250 ATM sites by yearend.