Increased loan volume, higher margins and improvement on loan loss provisions allowed the Asia United Bank Corp. (PSE: AUB) to realize income growth of 55 percent to P6.3 billion last year from the previous year’s P4.06 billion, the lender disclosed last Tuesday.
The bank said it ended the fourth quarter with a net income of P1.7 billion, 54 percent higher than a year ago.
Return on equity for the year was up to 16.2 percent from 11.1 percent in 2021 and 14.2 percent in pre-pandemic 2019. Return on assets stood at 1.9 percent in 2022, also higher than the previous year’s 1.3 percent.
“We believe our agility in achieving a balance among growth, pricing, expense and risk management will continue to enable us to surmount the challenges of higher inflation and interest rate volatility that are seen to persist in 2023,” AUB president Manuel A. Gomez was quoted in a statement as saying.
Higher interest income from loans and investment securities led to an 18-percent year-on-year increase in its net interest income to P12.9 billion while keeping interest expense at bay. This translated to a net interest margin of 4.2 percent from the previous 3.7 percent, according to the lender.
The bank said its operational expenses rose by 2 percent, resulting in a cost-to-income ratio of 37.5 percent, lower than 42.4 percent last year.
“This resulted from the bank’s continuous automation enhancements and process optimization to deliver quality services to customers efficiently at less cost,” a statement from the AUB read.
With the economy coming back on track and asset quality improving, AUB saw its loan portfolio grow by 12 percent to P195 billion from the 2021 level, which mostly came from the bank’s corporate clients which started restocking their inventories and resuming business activities due to the economy’s reopening.
AUB said reduced its loan loss provisions by 33 percent to P1.6 billion versus year-ago while its non-performing loans ratio shrank to 1 percent and NPL coverage ratio reached 115.1 percent.
Supporting the higher loan volume, its deposits grew by 10 percent to P288.8 billion, year-on-year. CASA deposits accounted for 75 percent of its total deposits while its loan-to-deposit ratio stood at 67.5 percent.
AUB remains as one of the top 20 banks in the Philippines with total assets of P340.2 billion in 2022, a 7 percent year-on-year increase compared with the flattish growth in the previous year.