Unionbank of the Philippines generated PhP19.4 billion in revenues in the first quarter, translating to a year-on-year growth of 8.4%. Topline performance continues to be driven by a growing consumer business, expanding net interest margin, and increasing fee-based revenues.
Currently, consumer loans account for 62% of the total loan portfolio, nearly 3x higher than the industry average. This is attributed to a diversified strategy with credit cards, personal loans, and teachers’ loans exhibiting the fastest growth. The Bank’s retail client base is now at 17.6 million, providing a solid foundation for growth in the future.
Net interest margin improved by 69 basis points to 6.3% on the back of higher-margin consumer loans and lower funding costs. For the latter, the Bank benefitted from the continuous growth of its low-cost deposits and easing monetary conditions. Furthermore, fee-based income grew 21.3% to P3.7 billion as the larger customer base resulted in higher transactions. Fees-to-assets increased to 1.3% from 1.1% previously one of the highest in the industry.
The strong topline performance gave the bank room to absorb the impact of one-time, tax-related write-offs from a subsidiary and front-loaded non-recurring costs. As a result, net income is down year-on-year to PhP1.4 billion in the first quarter.
“The underlying drivers of our financial performance remain solid. We continue to see substantial new client acquisitions month-on-month as well as expansion of our net interest margin and fee-based income. These indicate that the strong revenue trend will be sustained. Moreover, if we normalize for the impact of one-offs, our net income would be comparable to prior quarters. Moving forward, we expect performance to get back to this trajectory and we remain confident that we will exceed our 2024 performance,” said Manuel R. Lozano, Chief Financial Officer.
