Union Bank of the Philippines said Monday first half net income rose 6 percent year-on-year to P6.4 billion, with higher operating cost tempering gains from high double-digit growth in interest and fee-based income.
Net revenues for the first half of the year amounted to P34.4 billion, increasing by 60 percent as net interest income jumped 41 percent to P24.0 billion while fees and other income more than doubled to P10.5 billion.
Net interest income got a boost from the 43 percent increase in the bank’s loan portfolio plus better margin while non-interest income was primarily driven by card-related transactions, digital transactions, and the growing base of the bank’s key subsidiaries.
Union Bank said operating expenses were up by 82 percent to P21.8 billion on account of one-time integration cost of the acquired Citi consumer business and the establishment of UnionDigital.
Total assets as of June 2023 amounted to P1.1 trillion, up by 27 percent.
Net loans and receivables climbed up by 43 percent to P522.2 billion, while total deposits increased by 25 percent to P693.3 billion.
“We consider this year as a period of investing for our future. Our costs will temporarily be elevated this year, while the integration of the acquired Citi consumer business is ongoing,” said Manuel Lozano, Union Bank executive vice president and chief financial officer.
Lozano expressed confidence that Union Bank’s prospects is rosy on account of the lender’s healthy earning asset base, a diversified consumer loan mix, and double-digit growth from all business segment. He said operating expenses should ease substantially once Union Bank completes the integration of Citi.
Edwin Bautista, president and chief executive officer of Union Bank, said the lender is on track to achieve its goal of “becoming the largest and most profitable retail bank in the Philippines by 2025.”
“All our consumer business-engines are running in full speed. We now have over 12 million customers. The acquired Citi business is contributing around one-third of our income today. City Savings continues to be a market leader in providing salary loans. Union Digital is already profitable and growing fast,” he said.
