AUB net profit plunges in Q1 on heavy provisioning

Asia United Bank Corp. (AUB) said net profit declined 38% year-on-year to P736 million in the first quarter after it increased provisioning levels in anticipation of a rise in non-performing loans.

In a disclosure to the bourse, AUB said: “While lockdown persists and the economy continues to reel from the impact of the global pandemic, AUB has set aside an additional P638 million in loan loss provisions in the first quarter of 2021.”

The provisions were 586% higher from a year earlier, bringing the bank’s bad loan cover to the equivalent of 3.4% of its loan portfolio.

The bank’s return on equity was 8.5% while return on assets was 1%.

Deposits grew 20% to P261 billion, it said.

Growth was driven by an increase in low-cost current account/savings account (CASA) deposits, which now account for 73% of the deposit base compared to 65% previously.

AUB President Manuel A. Gomez said the performance of its deposits reflect the bank’s sustained investment in digital channels, which “have been paying off.”

Assets rose 14% year-on-year to P313 billion.

It started adopting the QR code “QRPH” this week after the central bank allowed person-to-merchant payment transactions through the code.

AUB shares shed 20 centavos on Friday to close at P43.80. — Beatrice M. Laforga

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