Asia United Bank Corporation Reported a Record-High 20.0% ROE and 2.8% ROA

In the first three months of the year, Asia United Bank (AUB) and its subsidiaries continued to generate record-breaking profitability, with a return on equity (ROE) of 20%, the highest in the bank's 27-year history. Additionally, it reported the greatest return on assets (ROA) since AUB's 2013 IPO, at 2.8%.

AUB's consolidated net income increased by 16% to P2.3 billion in the first quarter of the year, according to unaudited financial statistics, compared to the prior year. Lower loan loss provisions and a larger net interest margin (NIM) were the causes behind this.

Due to income growth from the bank's loan portfolio and investment activities, its net interest margin increased by 10% to P4 billion in the context of rising interest rates. As a result, the NIM ratio increased from 4.8% to 5.2% from the prior year.

Operating expenses increased by 12% in the first quarter as a result of increased wages, capital expenditures, and costs associated with corporate expansion. Despite the rise, AUB has continued to transition to digital platforms and automation, maintaining its operational efficiency.

From 1.0% to 0.47% in the previous year, the nonperforming loans (NPL) ratio indicates the ongoing improvement in asset quality. As a result, the loan loss provision decreased by 89% to P78 million from P709.2 million in the prior year. The bank's NPL coverage ratio has increased from 113.0% to 116.7%, indicating that it is still well protected against likely losses.

At P346.7 billion, total assets were P6% higher than at the same time last year. With a strong loan-to-deposit ratio of 66.5% and a total loan portfolio of P188.3 billion, deposits totaling P283.3 billion provided sufficient funding. With 73% of all deposits coming from the bank's low-cost CASA account, it continues to be the main source of funding.
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Retained earnings contributed P50.7 billion, or 18% more, to total equity. Its indicated capital adequacy ratio of 18.29% and common equity Tier 1 ratio of 17.55% are both higher than required by regulations.
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AUB distributed a special cash dividend of P0.33 per share and a 50% stock dividend in December 2023. It has already paid out P2 per share in two tranches (P1 in July and September 2023) prior to the stock dividend payment.

​“We aim to deliver consistent performance throughout 2024, so we can remain as a ‘challenger bank’ among the country’s top listed universal banks,” said AUB president Manuel A. Gomez. “With interest rates expected to remain elevated throughout the year, and global shocks a continuing concern, we will remain agile to sustain our performance.”