Asia United Bank Corporation Reported P5.2 Billion in Consolidated Net Income, Up 27% in H1-2024

Higher revenues and improving credit quality enabled Asia United Bank (AUB) and its subsidiaries to maintain their record-setting profitability in the first six months of the year. The group posted P5.2 billion in consolidated net income, 27% higher than the year-ago level, and equivalent to a return on equity of 21.9% and return on assets of 3.1%.

Net interest margin widened by 10% to P8.2 billion as interest income from its loan portfolio and investment activities rose. This resulted to a net interest margin ratio of 5.4% from the previous year’s 5.0%.
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“Thanks to the improving business environment, AUB continues to deliver consistent performance in the first half of the year. To remain a ‘challenger bank’ among the country’s top listed universal banks, we must become the ‘Digital Partner of Choice,’ advocating for open collaboration and helping others share in our success and responsibility to deliver financial inclusion,” 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. The bank is also one of the early adopters of the government’s National ID system, which is expected to hasten banks’ account opening and Know Your Customer (KYC) compliance, reduce paperwork, improve loan application and approval processes, and enhance security for financial transactions.

In the first half, AUB saw its operating expenses increase by 7% to P3.3 billion, mainly due to higher compensation, capital expenditures, and investments in further business growth. Despite the increase, the bank continues to show operational efficiency, with a cost-to-income ratio of 33.5%.

The bank’s higher profitability was also largely due to improved asset quality, as shown in its nonperforming loans (NPL) ratio of 0.43%, lower than the previous year’s 0.9%. This led to a 92% decline in loan loss provision to P78.0 million from P952.0 million, previously. The bank remains sufficiently covered from probable losses with an NPL coverage ratio of 150.8% from 114.8% a year ago.

AUB’s total assets stood at P349.0 billion, up 6% from the same period last year. Its total loan portfolio at P187.9 billion is sufficiently funded by P281.1 billion in deposits, with a loan-to[1]deposit ratio at 66.8%. Low-cost deposits (current account/savings account) remain the primary source of funding for AUB, comprising 75% of total deposits, an improvement from previous year’s 72%.

Total equity increased 18% to P51.6 billion from retained earnings. Indicative Common Equity Tier 1 Ratio was at 17.8% and its Capital Adequacy Ratio was at 18.6%, both above the regulatory minimum.

During its annual stockholders’ meeting on June 28, 2024, AUB’s board of directors declared a cash dividend of P2.33 per share payable in two tranches: the first, at P1.33 per share, is payable on July 31, 2024; and the second, at P1 per share, is payable on September 20, 2024.