UnionBank of the Philippines (UnionBank) reported a 167-percent surge in net income to P3.8 billion in the first quarter of 2026, driven by strong loan growth and higher core revenues.

In a Monday disclosure, UnionBank said the first quarter sustained the earnings momentum seen in the second half of last year, when its second-half 2025 earnings grew 108 percent compared with the first half.

Quarter-on-quarter, net income rose 8.7 percent, which the bank said signals continued recovery despite trading losses linked to market volatility arising from geopolitical tensions, including the Middle East conflict.

“We are carrying over strong momentum, building on the actions we took in 2025 to strengthen our balance sheet and lay the foundation for sustainable growth,” said UnionBank Chief Financial Officer Manuel R. Lozano.

“However, recent geopolitical developments have introduced potential risks. In response, we took proactive measures to reinforce our portfolio and enhance credit risk management,” he added, noting the bank remains well-positioned in terms of capital and liquidity to navigate market volatility.

Net revenues rose 11.8 percent year-on-year to P21.7 billion, supported by core business segments, while total customers increased 7.6 percent to 18.9 million, providing a wider base for lending and cross-selling opportunities.

Net interest income climbed to P16.8 billion on the back of sustained loan expansion. Consumer lending, which accounts for 60 percent of the bank’s portfolio, remained a key growth driver, with unsecured loans rising 19.2 percent to P153.1 billion. Institutional loans also increased 11.5 percent to P223.7 billion.

The bank’s net interest margin improved by 34 basis points to 6.7 percent, supported by a 7.8-percent rise in low-cost deposits (CASA), reflecting stronger transaction banking relationships built in 2025.

Fee income remained steady, with a fee income-to-assets ratio of 1.3 percent—more than double the industry average—driven by higher digital transaction volumes, as well as contributions from wealth management and bancassurance businesses.

Asset quality also improved, with credit costs declining 17.9 percent year-on-year to P4.5 billion and down 19.1 percent quarter-on-quarter, as portfolios continued to season and legacy exposures were addressed.

At the bank’s annual stockholders’ meeting last Friday, UnionBank President and CEO Ana Aboitiz Delgado said the bank entered 2026 on solid footing following a year focused on strengthening governance, risk discipline, and operational reliability.

“We entered 2026 with a clear agenda for a next-generation UnionBank—one that blends technology with human insight to serve customers across every stage of their financial journey,” Delgado said.

Meanwhile, Moody's Ratings recently affirmed the bank’s Baa3 long-term issuer and deposit ratings with a stable outlook, indicating its credit profile is unlikely to change in the near term.

The affirmation reflects UnionBank’s strong capital position and ample liquidity buffers, which Moody’s said help offset risks tied to weaker asset quality and relatively high exposure to unsecured retail lending. The agency also noted that UnionBank’s capital adequacy remains solid, with its tangible common equity ratio at 16.4 percent as of end-2025, providing a sufficient cushion against higher-risk assets. Liquidity metrics were likewise robust, including a liquidity coverage ratio of 260 percent.