Asia United Bank (AUB) President Abraham Co projected net income significantly better this year than last on the back of economic growth expected at accelerate to 6.5 percent in terms of the gross domestic product.
The bank will continue to grow its corporate and retail operations on strong demand for loans to fund business-expansion programs and consumer activities.
“We will sustain our loan-portfolio growth through project financing, especially on infrastructure, energy and other growth segments. We will increase our penetration in medium corporation and retail markets,” he said at the bank’s recent shareholders’ meeting. About 12 percent of the bank’s total loan portfolio is retail.
“On retail side, we expect to grow by 50 percent, driven by real-estate loans, auto loans and later on our credit-card business,” he told the BusinessMirror.
He said the growing middle class has created more demand for credit cards, and AUB will be offering this product by the last quarter of the year.
The growth of its retail business will be complemented by the growth in its distribution network. The bank will add 16 branches this year, from 219 as of end 2014.
These additional branches, with minimum investment of P6 million each, will be put up mostly in Metro Manila.
Co sees recovery in trading gains this year. However, he projects the compression of net interest margins due to stiffer competition and pressure on operating cost.
AUB and its subsidiaries posted a net income of P448.9 million in the first quarter of 2015, 119 percent higher than a year ago’s P205.32 million.
The bank saw double-digit growth in interest income from loans as well as a strong rebound in trading and investments.
The bank’s loan portfolio in the first quarter grew by 39 percent to P73 billion.
Consequently, its net interest margin increased by 21 percent to P1 billion from year-ago.
Its operating income stood at P1.5 billion, 46 percent higher than in the same quarter last year.
Total assets stood at P127 billion, 14 percent higher than its level of P112 billion in the first quarter of 2014.