Tuesday, 27 April 2010

UnionBank 1st-quarter profit up 51% on lower interest expense

Erik de la Cruz
Business Mirror

ABOITIZ-LED UnionBank of the Philippines, the country’s eighth-largest bank in terms of assets at the end of 2009, posted a 51-percent increase in profit for the first quarter of 2010 as lower interest expense helped boost net interest income.

Figures released on Monday showed the bank’s net income for the three months to March hit P855.2 million, compared with P565.2 million for the same period last year.

Net interest income grew 19 percent to P1.72 billion despite a 5-percent drop in interest income on loans and receivables, as interest expense declined by 25 percent to P1.18 billion.

Deposit liabilities dropped by 4 percent, or about P7.7 billion, to P186.8 billion at the end-March from end-2009.

Net loans and other receivables contracted by 16 percent to 84.6 billion. This contributed to the 3-percent drop in resources to P236 billion.

Trading and investment securities contributed P1.08 billion to interest income, up 10 percent compared with P984.4 million for the same period last year.

Additional provisions for impairment losses of P106.7 million were lower compared with P171 million booked in the first quarter of 2009. Net interest income after impairment losses, thus dropped to P1.6 billion.

The bank also booked lower income from service charges, fees and commissions, which dropped 18 percent to P152.5 million.

Trading gains rose 55 percent to P213.7 million.

Earnings per share improved to P5.33 from P3.52 in the same quarter last year.

UnionBank, which is partly owned by state-administered pension fund Social Security System and Insular Life Assurance Co. Ltd., recently opened three new branches, increasing its total branch network to 178.

Shares in UnionBank rose 50 centavos, or 1.2 percent, to P43 on Monday. The bank will pay on June 4 to shareholders as of May 11 a cash dividend of P2.20 per share.

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