UNION BANK of the Philippines, Inc. (UnionBank) saw its net income rise by 76% to P3.5 billion in the third quarter, it said on Monday.

This brought its nine-month net profit to P8.56 billion, the bank said in a disclosure to the stock exchange.

Its financial statement was unavailable as of press time.

The bank’s net revenues climbed by 9.2% year on year to P57.7 billion in the first nine months from P52.8 billion, which was driven by the expansion of its consumer loan portfolio, it said, adding that consumer credit now makes up 60% of its loan book.

“The bank efficiently allocated its capital to expand its consumer lending activities, which was evident in our record-high net revenues. The leading indicators brought about by our growing retail customers are very promising,” UnionBank Chief Executive Officer Edwin R. Bautista said in a statement.

“Our new-to-bank credit card customers per month are averaging 2.5 times higher than last year. The active users of our digital channels have increased to 5.6 million from 4.7 million last year. Consequently, we have seen digital fund transfer transactions growing by 40% year-on-year. These customer metrics are the ones driving revenues today and onto the future,” he added.

Net interest income rose by 14.2% to P42.56 billion, with its interest earnings at P62.48 billion and interest expenses at P19.89 billion amid an elevated rate environment.

Its net interest margin improved by 58 basis points (bps) year on year to 5.9%, which it said is among the highest in the industry.

“The large proportion of our consumer portfolio is reflected in the continuous improvement of the bank’s net interest margin. With the improving macroeconomic backdrop and expectations of declining interest rates, there is still room for further margin expansion. We should be able to reprice our funding cost downwards, while sustaining the high yields coming from our consumer business,” UnionBank Chief Financial Officer Manuel R. Lozano said.

Meanwhile, the bank’s other income stood at P15.083 billion at end-September.

“Moreover, the bank’s ability to generate fee income as a proportion to its assets is at 1%. This is more than double the Philippine banking industry’s average,” UnionBank said.

On the other hand, UnionBank’s operating expenses stood at P33.027 billion in the first nine months.

“IT (information technology) related expenses went down by 17.3% versus the first nine months of 2023. The downward trend in IT expenses started when we concluded the integration of the acquired Citi consumer business earlier this year,” it said.

“The bank continued to invest on customer acquisition, service delivery, and client engagement to maintain its strong momentum in the growth of its consumer business. This has resulted in the strong growth in our customer base, which is now over 15 million as of September 2024. This includes close to 500,000 new credit card clients this year,” UnionBank added.

Provisions for credit losses stood at P13.51 billion.

The bank’s net loans and receivables reached P523.25 billion at end-September.

On the funding side, its deposit liabilities stood at P652.63 billion, with low-cost current and savings account or CASA deposits at P419.4 billion.

UnionBank had P1.15 trillion in assets at end-September, while its capital funds stood at P193.06 billion.

The bank’s shares lost P2.10 or 5.12% to end at P38.95 apiece on Monday. — BVR