ASIA United Bank (AUB) saw its nine-month consolidated net income grow 32 percent year-on-year to a “record-high” P6.1 billion on sustained business volume and margin growth, and higher non-interest income.
“With our stronger performance in the first three quarters, we expect to maintain our lead among the country’s top ten listed universal banks in terms of compounded annual growth rate (CAGR) on key indicators since AUB was listed on the bourse in 2013,” AUB President Manuel Gomez said in a statement on Monday.
The bank recorded a return on equity of 19.4 percent and return on assets of 2.5 percent for the first nine months of this year.
Total operating income rose 21 percent to P13.3 billion on the back of a 20-percent increase in net interest income to P11.2 billion, while non-interest income grew 27 percent to P2.1 billion.
Total loan volume, meanwhile, increased 7.0 percent to P188.2 billion, boosted by growth from corporate and consumer loans as confidence in the economy further improved. This resulted in a wider net interest margin of 4.9 percent compared to the previous year’s 4.1 percent.
AUB said that its remittance, credit card, trust, AUB PayMate, and trading businesses contributed to strong growth in non-interest income.
Amid higher loan volumes, the bank worked to maintain asset quality. It said that its net nonperforming loans (NPL) ratio was 0.67 percent while the gross NPL ratio was 2.14 percent, both lower than the banking industry averages of 1.37 percent and 3.11 percent, respectively.
AUB recognized provisions of P1.1 billion year-to-date, a 12-percent increase from the P1.0 billion booked in the same period last year. This boosted the NPL coverage ratio to 107 percent as of September 30, up from 89.1 percent the previous year.
Total deposits stood at P284.5 billion, with low-cost CASA (current account/savings account) deposits comprising 70.6 percent of the total deposit base, while its loan-to-deposit ratio stood at 66.2 percent.
The bank reported a 12-percent increase in operating expenses in the first nine months to P4.8 billion, primarily due to compensation increases and transaction volume-related expenses.
Despite the higher operating expense, the cost-to-income ratio declined to 35.8 percent from the previous year’s 38.6 percent.
For the third quarter alone, the bank’s net income rose 15 percent to P2.0 billion.
“While we are seeing that the domestic economy has emerged strongly from the pandemic and many sectors are now on the path to recovery, we remain cautious of the confluence of global shocks that are unraveling,” Gomez said.
“We expect monetary policy to remain hawkish, with inflation still not kept at bay. On the other hand, we see plenty of room for growth and collaboration, particularly in digital transformation.”
AUB shares rose by 30 centavos, or 0.67 percent, to P44.80 each on Monday.