UnionBank of the Philippines saw its net income slide to P3.251 billion in the first half of the year, down 35.9 percent from P5.069 billion a year ago, as one-time costs and higher credit provisions weighed on earnings.

In a disclosure to the stock exchange on Monday, the Aboitiz-led UnionBank said total revenues climbed 9.2 percent year-on-year to P39.7 billion, fueled by robust net interest income and stronger fee-based earnings. 

Unionbank pointed out that topline gains helped cushion the impact of elevated credit costs from its growing credit card portfolio and subsidiaries, along with one-off expenses tied to strengthening the bank’s operational backbone.

“Our topline has consistently shown an encouraging trend, and with lower costs ahead, we anticipate improved net income in the coming months. These efforts position the Bank for a more resilient, sustainable, and accelerated trajectory as we enter the next phase of our growth journey,” UnionBank President and CEO Ana Aboitiz Delgado said.

Net interest margin, on the other hand, also improved by 61 basis points to 6.4 percent, supported by growth in its high-yielding consumer portfolio, particularly credit cards and personal loans.

Funding costs also eased, aided by a lower interest rate environment and an increase in low-cost current and savings account (CASA) deposits. UnionBank’s CASA ratio improved to 65.2 percent.

Retail customers reached 18 million in the first half, boosting transaction volumes and lifting fee income by 17.1 percent. The bank’s fees-to-assets ratio stood at 1.3 percent, among the highest in the industry.

“As we continue our efforts to grow our customer base, we are also ensuring we enhance operational resilience to be able to deliver our desired customer experience. These strategic moves come with upfront costs booked in the first half. This positions us to better reflect the Bank’s true performance moving forward,” Aboitiz said.