Asia United Bank Corporation Posts Record-High Net Income in First 9 Months

Asia United Bank (AUB) and its subsidiaries further improved their profitability in the first nine months of the year due to higher revenues and lower loan loss provisions.

The group posted another record-high P8.6 billion in consolidated net income, 41% more than the year-ago level and surpassing its full-year net income of P8.3 billion in 2023. This translated to a return on equity of 22.4% and return on assets of 3.4%, both higher than the previous year’s 19.4% and 2.5%, respectively. 

Net interest margin increased 11% to P12.5 billion due to an increase in interest income from its loan portfolio and investment activities. Its net interest margin ratio rose to 5.3% from the previous year’s 4.9%.

Non-interest income grew from improved foreign exchange gain, recovery income, and service charges and other fees from other operating activities such as credit cards, AUB PayMate, remittance, trust, and other branch-related transactions.

The bank’s operating expenses grew by 6%to P5.0 billion during the first three quarters, largely because of higher staff compensation and capital expenditures as it focused on new business growth opportunities.

Credit and impairment losses plunged by 93% from P1.1 billion a year ago, as credit quality improved. The bank posted a nonperforming loans (NPL) ratio of 0.53% from the previous year’s 0.7%. It remains sufficiently covered from probable losses with an NPL coverage ratio of 120.7% versus the previous year’s 107.0%.

Total assets stood at P352.0 billion, up 2% from the same period last year. Its total loan portfolio grew 6% to P198.9 billion from P188.2 billion a year ago. This is sufficiently funded by deposits at P282.0 billion, with a loan-to-deposit ratio of 70.5%. The bank’s low-cost CASA deposits remained the primary source of funding, comprising 70% of total deposits versus the previous year’s 66%.

Total equity increased 25% to P56.6 billion from retained earnings. Its indicative Common Equity Tier 1 Ratio of 19.6% and Capital Adequacy Ratio of 20.4% are both above regulatory requirements.

“We expect our performance to remain robust, especially as we start reaping the full benefits of the government’s National ID system, with AUB being the first Philippine bank to integrate the Philippine Statistics Authority's eVerify. This will hasten our account opening process and Know Your Customer (KYC) compliance, reduce paperwork, improve loan application and approval processes, and enhance security for financial transactions,” said AUB President Manuel A. Gomez.

Through its digital partnerships, AUB has been enabling merchants to accept digital payments from their customers using its all-in-one digital payment acceptance product AUB PayMate and revolutionizing cross-border digital payments through its HelloMoney e-wallet, among others.