UnionBank bottom line slips in Q2

The Union Bank of the Philippines Inc. posted a decline in bottom line in the second quarter of the year, dragged by higher operating expenses.

In a regulatory filing submitted by Assistant Vice President Lalaine Ann Batac, the company reported a net income of P1.781 billion in the April to June, down from P2.150 billion a year earlier.

Operating expenses climbed to P3.756 billion from P3.315 billion in 2017, while net interest income grew to P4.209 billion from P4.146 billion.

Net income in the first half of the year, however, reached P4.715 billion, up from P4.365 billion in January to June 2017.

“We are ahead of our target for the year despite margin compression in the first half due to higher interest rates and regulatory compliance,” said Jose Emmanuel Hilado, Treasurer and CFO.

The Bangko Sentral ng Pilipinas has raised policy rates twice by a combined total of 50 basis points so far this year.

“For the remainder of the year, we expect recurring income to drive profitability. We anticipate margins to improve as loan rates start to catch-up against deposit cost,” Hilado said. —Jon Viktor Cabuenas/VDS, GMA News