AEV to boost banking operations

CEBU, Philippines - Aboitiz Equity Ventures (AEV) financial arms, the universal bank UnionBank, and thrift bank City Saving’s bank aims to take advantage of the country’s good economic outlook, by expanding their niches in the banking system.

AEV chief executive officer (CEO) Erramon I. Aboitiz announced that UnionBank will boost its customer franchise through greater retail focus and stronger sales management.

According to Aboitiz the bank will continue investing in technology and rationalize branch network expansion in strategic areas to maximize growth channels for deposits and loan accounts.

On the other hand, City Savings growth momentum continues to be focused in Luzon. It recently opened branches in Batangas and Bicol to bring its simple and straight worked style of service to customers in those areas, said Aboitiz.

Robust earnings performances of both UnionBank and City Savings, coupled with the bottomline effect of the increased ownership of AEV in both banks, resulted to a net earnings contribution of P3.4 billion in 2011, 31 percent higher than the previous year.

UnionBank ended the year with an earnings contribution of P2.9 billion, up by 26 percent. Apart from the effect of increased ownership, UnionBank’s bottomline for this period grew by 23 percent.

City Savings, contributed earnings of P531 million in 2011, 69 percent higher than 2010.

Earlier, Aboitiz reported that the full year impact of increased ownership coupled with a seven percent year-on-year improvement in earnings accounted for the income expansion.

The robust growth of City Savings lending activities resulted to a 29 percent expansion in the bank’s net interest income.

However, a 36 percent increase in operating expenses that resulted from the implementation of the City Savings expansion program and its various initiatives during the year, tempered the bank’s profitability.

On a combined basis,  total interest income from the conglomerate’s banking group grew by three percent to P13.7 billion.

Gross loan book ended the year at P97 billion, recording a 20 percent expansion from 2010. Both banks have NPL (non-performing loan) ratios that remain below industry averages and are adequately reserved.

Branch expansion initiatives by both banks brought on a seven percent increase in their combined total deposits, ending 2011 at P212 billion. (FREEMAN)