Announcements

• AUB sustains momentum with 34% net income growth
  More robust lending activities and digital partnerships enabled Asia United Bank (AUB) and its subsidiaries to sustain a streak of double-digit net income growth in 17 straight quarters since the COVID-19 pandemic in 2020.
  In the first three months of the year, the banking group saw its consolidated net income jump a 34% to P3.1 billion from P2.3 billion a year ago. This translated to a return on equity (ROE) of 22.3% and a return on assets (ROA) of 3.4%, breaching year-ago ratios of 20.0% and 2.8%, respectively.
  The much-improved profitability was attributed to a 34% expansion in its loan portfolio to P252.6 billion from P188.4 billion a year ago. Asset quality continued to improve despite the loan growth, with its nonperforming loan (NPL) ratio at 0.35% from the previous year's 0.47%, among the lowest in the industry.
  AUB also further reduced its loan loss provision by 15% to P66.0 million from P78.0 million in the same quarter last year. It remains sufficiently covered, with an NPL coverage ratio at 119.8%, higher than previous year's 116.7%.
  Interest expense on deposits increased 11% year-on-year as total deposits rose by 9% to P308.1 billion. The higher interest expense was offset by a 9% increase in interest income to P5.6 billion. This resulted to a net interest income of P4.3 billion, 8% higher versus the year-ago level, and a net interest margin of 5.1%. The bank's low-cost deposit (current account/savings account or CASA) remains its primary source of funding, accounting for 69% of its total deposits.
  Non-interest income grew 81% to P1.3 billion as other non-interest bearing business activities such as trading and securities gains, foreign exchange gains, miscellaneous income and service charges and other fees from other operating activities such as credit cards, AUB PayMate, HelloMoney, remittance business, trust and other branch-related transactions grew.
  Operating expenses rose by 9% to P1.8 billion, mainly due to higher compensation, capital expenditures, and business growth-related expenses. Thanks to its heavy reliance on digital partnerships, the bank continues to exhibit efficient resource management in its business generation as evidenced by its 32.6% cost-to-income ratio.
  Total assets grew 11% to P384 billion while total equity increased 22% to P61.8 billion, mainly from better operating results. The bank is adequately capitalized with capital ratios well above regulatory requirements. It has an indicative Common Equity Tier 1 Ratio of 17.49% and a capital adequacy ratio of 18.19%.
  "We have managed to sustain the growth in our profitability since the pandemic, thanks to our robust core business and digital partnerships. While we are confident of our performance, we remain cautiously optimistic about the near-term outlook for the global economy due to the ongoing trade wars, the potential disruption in global supply chains, the projected slowdown in many major economies, and the growing geopolitical tension in some parts of the world," said AUB President Manuel A. Gomez. "We will continue to adjust our sails to navigate this global turmoil and remain agile."


• BANCNET ADVISORY
  BancNet advised its member banks that InstaPay transactions are temporarily unavailable. BancNet informed us that it is in the process of resolving the matter. For unsuccessful InstaPay transactions, please expect the funds to be posted to the sending or receiving bank within three (3) banking days after reconciliation.
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• IMPORTANT ADVISORY
  In order to continue serving you better, we will be conducting a scheduled system maintenance on March 22, 2025 (Saturday) from 7:00 AM to 1:00 PM.
  Kindly be advised that some of our services will be unavailable during this period. We encourage you to schedule your banking transactions ahead of time.
  We apologize for any inconvenience.
  Thank you for understanding.


• AUB: Interest rates to remain elevated, boost USD assets
  The bad news: Global inflationary pressures may not ease soon due to the impending tariff wars between the United States and other major trading partners like Canada, Mexico, and China.
  The good news: With the U.S. Federal Reserve maintaining a hawkish monetary policy, U.S. interest rates will remain high so yields on dollar-denominated assets will continue to be attractive.
  Asia United Bank (AUB) Senior Vice President and Head of Trust Andrew Chua made these projections after the U.S. imposed 25% tariffs on imports from both Canada and Mexico, as well as a 10% tax on Canadian energy. Both countries have also warned of reciprocal tariffs against their largest export market.
  "With what looks like the start of a trade war, inflationary pressures are expected on the global front," Mr. Chua said. "Overall, we expect volatility to remain elevated as continued uncertainty persists in both the global economic as well as geopolitical front."
  This bodes well for investors on the lookout for higher-yielding U.S. dollar assets such as AUB's Gold Dollar Fund (GDF) and stable Philippine peso-denominated assets such as AUB Peso Investment Fund (PIF). Both were recognized by the CFA Society Philippines as among the country's 20 best managed funds, with GDF bagging its ninth award since 2016 in the Dollar Medium-Term Bond Fund category and PIF its second award since 2018 in the Peso Medium-Term Bond Fund category. A total of 170 qualified funds from 17 investment houses and trust Institutions joined this year's awards.
  "From an investment perspective, our PHP and USD bond funds will continue to be opportunistic in terms of deploying funds, taking positions on the belly of the curve with a duration of three to five to years," Mr. Chua said. "We believe this space will give us the best returns in terms of accruals with the least volatility. Shifts in interest rates will most probably tilt the yield curve leaving the belly to be least affected."
  On the impact of the tariff wars, he said the Philippines could be the least affected in the Southeast Asian region in terms of retaliatory tariffs given its existing import and export profile. Despite the expected monetary policy tightening in the U.S., the Bangko Sentral ng Pilipinas" may have some leeway in cutting local rates because of the recent strengthening of the peso," Mr. Chua said. "Both these factors should bode well for our local economy."


• AUB still among fastest-growing banks
  A double-digit growth in loan portfolio and a steady decline in loan loss provisions enabled Asia United Bank (AUB) and its subsidiaries to sustain their profitability and further strengthen their reputation as one of the fastest-growing local banks in terms of compounded annual growth (CAGR) in 2024.
  The group posted a consolidated net income of P11.3 billion, 36% more than the year-ago level of P8.3 billion, and representing a 21% CAGR since AUB became a publicly listed universal bank in 2013. Its 2024 net income translated to a return on equity of 21% and a return on assets of 3% - not only higher than the previous year's 18.6% and 2.4%, respectively, but also among the highest in CAGR from 2013 to 2024.
  "We have managed to sustain the growth in our profitability since the pandemic, thanks to our robust core business and digital partnerships. AUB is able to reach out to many Filipinos, including the unbanked and underserved, to offer digital payment solutions such as our all-in-one digital payment acceptance product AUB PayMate, as well as revolutionize cross-border digital payments through our HelloMoney e-wallet, among others," said AUB President Manuel A. Gomez.
  AUB's revenue growth mainly came from its loan portfolio which grew 26% to P245.4 billion from P194.5 billion a year ago - translating to one of the highest CAGR of 16%. Despite the loan growth, its asset quality further improved, with its nonperforming loan (NPL) ratio at a record low of 0.3% and loan loss provision reduced by 74%. The bank remains sufficiently covered, with an NPL coverage ratio at 113.7%, higher than previous year's 107.9.
  Net interest margin widened 11% to P16.8 billion due to an increase in interest income from the bank's loan portfolio and investment activities. Interest expense on deposits dipped 3% despite an increase in deposit volume, resulting to the widening of net interest margin ratio to 5.0% from the previous year's 4.8%. The bank's low-cost deposit (current account/savings account or CASA) remains its primary source of funding, with a 71% share of total deposits.
  Non-interest income grew 48% to P4.1 billion from improved foreign exchange gains, recovery income, and service charges and other fees from other operating activities such as credit cards, AUB PayMate, HelloMoney, remittance business, trust and other branch-related transactions.
  Operating expenses rose by 6% to P6.8 billion mainly due to higher compensation, capital expenditures, and business growth-related expenses. The bank continues to exhibit efficient resource management in its business generation as evidenced by its 32.8% cost-to-income ratio, even lower than the previous year's 36.2%.
  Total assets grew 9% to P386 billion while total equity increased 19% to P58.4 billion, mainly from retained earnings. The bank is adequately capitalized with capital ratios well above regulatory requirements. It has an indicative Common Equity Tier 1 Ratio of 17.0% and a capital adequacy ratio of 17.8% - higher than previous year's 16.9% and 17.5%, respectively.
  "We hope to sustain our growth momentum as we start reaping the full benefits of the government's National ID system, which will hasten our account opening process and Know Your Customer (KYC) compliance, reduce paperwork, improve loan application and approval processes, and enhance security for financial transactions," Mr. Gomez added.
  Recently, AUB became the first privately owned universal bank to enter into a colocation partnership agreement with the Philippine Statistics Authority (PSA), after being the earliest bank to integrate the PSA's eVerify into its HelloMoney e-wallet last year. The bank has already successfully gained around 94,000 new HelloMoney users as of February 3, 2025, and expects its six million HelloMoney customer accounts to further grow as it brings the benefits of the National ID closer to more Filipinos.