UnionBank's First Quarter Net Income Soars To PHP2 Billion, Driven By Digital Innovation

Union Bank of the Philippines, a trailblazer in digital banking, has reported a remarkable surge in net income, reaching PHP2 billion for the first quarter of 2024, marking a 14% increase compared to the same period in 2023.

UnionBank's growth was fueled by the increasing proportion of consumer loans, higher net interest margins, and transaction fees. I Photo: Aboitiz Eyes / Aboitiz Equity Ventures

In a disclosure to the Philippine Stock Exchange (PSE), the bank attributed its robust performance to strong topline revenues, which grew by 14% year-on-year. This growth was fueled by the increasing proportion of consumer loans, higher net interest margins, and transaction fees.

The bank's net interest income witnessed a notable 17% growth to PHP13 billion, while non-interest income, excluding trading gains, saw a 13% increase to PHP4.7 billion.

Significantly, consumer loans now constitute 59% of UnionBank's total loan portfolio, nearly three times higher than the industry average, underscoring the bank's focus on retail banking.

Manuel R. Lozano, Chief Financial Officer of UnionBank, expressed satisfaction with the bank's first-quarter performance, noting that it exceeded expectations in key growth metrics.

He highlighted the successful integration of the acquired Citi Consumer business into UnionBank systems, despite incurring a one-time integration cost of PHP1.1 billion in the first quarter.

Lozano emphasized that while the integration temporarily impacted profitability, it was a strategic initiative aimed at unlocking long-term efficiencies and benefits.

He announced the completion of the final phase of the Citi integration on March 24, 2024, which involved the seamless transfer of millions of customer and transaction records from Citi to UnionBank's platforms.

"With the conclusion of the Citi migration, we anticipate a reduction in one-time costs and a renewed focus on realizing the full benefits from cross-selling to our expanding customer base," stated Lozano.

Furthermore, UnionBank's marketing investments yielded promising results, leading to a significant increase in new-to-bank credit card customers, more than doubling last year's acquisition rate.

This expansion of the customer base enhances the bank's ability to offer a comprehensive range of products and services.

As of March 2024, UnionBank's total assets stood at PHP1.1 trillion, with total loans reaching PHP521 billion and low-cost CASA deposits amounting to PHP431 billion. UnionBank continues to innovate and invest in digital solutions, positioning itself as a leader in the Philippine banking landscape.