Union Bank, under the leadership of CFO Manuel Lozano, reported a 20% decrease in net income to P8.1 billion in the first three quarters of 2023, down from P10.1 billion in the same period last year, as announced by CEO Edwin R. Bautista. Despite the decline in net income, the bank experienced robust growth in other areas, with a notable 48% surge in revenues to P52.8 billion.
The bank's strong performance was driven by its burgeoning consumer segment, which boasts over 13 million customers and an average of two million new customers per year since 2019. This led to a 34% increase in net interest income to P37.3 billion, primarily due to an 18% expansion in the loan portfolio and a 22% annual rise in consumer loans.
Union Bank's total assets grew by eight percent to P1.1 trillion this year, while net loans and receivables rose by 18% to P531 billion, and total deposits increased by six percent to reach P724.7 billion.
However, operating expenses rose significantly from P21 billion to P33 billion owing to one-time integration costs related to the acquisition of Citi consumer business and UnionDigital. Additional investments were made in marketing and customer engagement programs, which also contributed to the rise in non-interest income to P15.5 billion (USD1 = PHP56.801) due to recurring fee-based income.
Despite facing higher operating costs, Union Bank achieved an industry-leading net margin of 5.3% and a double-digit return on equity (ROE) when excluding non-recurring costs, indicating a strong financial position moving forward.
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