Asia United Bank Corporation Hits PHP 8.3B Net Income in 2023, Up 32%

Asia United Bank (AUB) and its subsidiaries posted a consolidated net income of P8.3 billion in 2023, a 32% increase from the previous year’s P6.3 billion and the highest in its 26-year history.

Based on unaudited financial results, the latest income figure translates to a return on equity (ROE) of 18.6% and a return on assets (ROA) of 2.38% — both record highs since the bank had its initial public offering (IPO) in 2013. The ROE and ROA rose from the previous year’s 16.1% and 1.9%, respectively.

“We attribute this vastly improved performance to our robust loan growth, more profitable net interest margin (NIM), continuously improving credit quality, and higher operating efficiency,” said AUB president Manuel A. Gomez.

AUB's NIM widened by 17% to P15 billion in 2022 in the context of rising interest rates. Net non-performing loans (NPL), a measure of credit quality, was 0.58%, significantly lower than the 1.60% for the sector. Due to this, loan loss provisions were decreased to P1.2 billion, or 27% less than in 2022. The bank managed to increase its operating efficiency in 2023, as evidenced by its cost-to-income, which further decreased to 36.3% from the previous year's 37.6%, even though operating expenses increased to P6.5 billion.

While total deposits increased to P292 billion, the majority of those deposits remained low-cost CASA deposits, and total assets increased by 4% to P355.1 billion.

Equity rose 23% year over year to P49.1 billion, which translates to a capital adequacy ratio of 17.49% and a common equity tier 1 ratio of 16.88%, both significantly over the legal level. AUB paid out cash dividends of P2.33 per share (P2 pre-stock dividend and P0.33 post-stock dividend) in three tranches in 2023, along with a 50% stock dividend.

“With our stronger performance in 2023, we expect to solidify 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,” said Mr. Gomez. “However, with interest rates expected to remain elevated this year, and global shocks a continuing concern, we have to remain agile to sustain our performance.”