UnionBank, China Bank report decline in net profits

MANILA, Philippines - The UnionBank of the Philippines Monday reported a 34% contraction in net income after tax at the end of the third quarter due to lower trading and investment securities gains. Net income after payment of P269.7 million in taxes amounted to P1.688 billion, substantially lower than the P2.568 billion recorded as of September last year. The bank’s income statement, posted in the Philippine Stock Exchange website, showed a sharp decline in trading and investment securities gains that could not be offset by higher interest income from loans and investments. The bank also realized lower interest income from its deposits with other banks — P684 million versus P2.272 billion a year ago. The bank, however, pointed out that deposits rose by 44.6% to P152.5 billion, which allowed it to increase its loans by 71.8% to P71.1 billion. In a statement, UnionBank Chairman and Chief Executive Officer Justo A. Ortiz said: "The recurrent increase in our deposit base and lending business affirms the bank’s stability and effective strategy execution." China Banking Corp. also reported that its consolidated net income as of September dipped by 9.4% to P2.28 billion. Interest income fell by 2.9% despite growth in lending due to an "industry-wide decline in net interest margins" while non-interest income rose by 15.6% even if trading gains declined. China Bank said its non-interest income was boosted by robust growth in trust fees, service charges, fees and commissions as well as sale of acquired assets. In a statement, China Bank President and Chief Executive Offer Peter S. Dee said "the year 2008 has proved to be an exceptionally tough year across the globe." - BusinessWorld