Union Bank of the Philippines (UnionBank) boosted its net income by 76 percent to P3.5 billion in the third quarter compared to the same period in 2023 as retail lending expanded while information technology (IT) costs decreased.

In a statement to the Philippine Stock Exchange on Monday, UnionBank said the third-quarter performance was 14 percent higher than the second quarter and brought its total net income in the first nine months to P8.6 billion.

Cumulative net interest income jumped by 14.2 percent to P42.6 billion, as consumer loans generated total loans and receivables worth P523.2 billion.

Lendings expanded

“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 Bautista said.

UnionBank said its loans to individual customers now make up 60 percent of its portfolio or three times bigger than the industry average.

Given its higher loan and interest-based incomes compared to depositor liabilities, the bank’s net interest margin improved by 58 basis points.

Deposits remained substantial, with P419.4 billion in current and savings accounts offering low savings rate.

“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 Lozano said.

UnionBank also said it registered 500,000 more credit cardholders after it acquired Citi’s consumer business in August 2022.

As a result, UnionBank’s clients increased to over 15 million.

IT expenses also declined by 17.3 percent, following the complete integration of Citi clients into UnionBank’s system. IT costs and investments for better customer acquisition and delivery of services led to a total operating cost of P33 billion.

Bautista said active users of digital channels increased to 5.6 million from 4.7 million last year. He said digital fund transfers, for example, surged 40 percent. “These customer metrics are the ones driving revenues today and onto the future,” Bautista said.

Total assets as of September stood at P1.1 trillion

During the bank’s annual stockholders meeting in April, Bautista expressed optimism for UnionBank after it sealed partnerships with entrepreneurs and government data showed higher consumption of some goods and services. “Its collaboration with Angkas will bring banking services to about 200,000 motorcycle drivers in Metro Manila,” he said.

“Jobs in factories and services, money sent from abroad and tourism should help the bank’s growth,” Lozano added.