Asia United Bank (AUB), a financial powerhouse backed by the Rebisco group, has announced a record-breaking financial performance for 2024, reporting a staggering 36% surge in net income.
The bank’s earnings catapulted to a historic high of P11.3 billion, up from P8.3 billion in 2023, signaling a year of exceptional growth and strategic success.
AUB attributed its remarkable performance to a confluence of factors, notably a significant reduction in loan loss provisions and a robust double-digit expansion of its loan portfolio.
This impressive growth underscores the bank’s effective risk management and its ability to capitalize on the prevailing economic climate.
“Our consistent profitability development is a testament to AUB’s strong core business and our deepening digital relationships,” stated Manuel Gomez, President of AUB.
“We are committed to expanding our reach to a wider spectrum of Filipinos, including the underserved and unbanked, through innovative digital payment solutions like AUB PayMate and our groundbreaking HelloMoney e-wallet for cross-border digital payments,” he added.
In February last year, the bank also entered into a partnership with Alipay+ to expand its e-wallet app and drive digitalization in banking. To support the government’s digital transformation roadmap, it has also launched HelloMoney, an e-wallet app that users can easily access by registering for an account on the AUB portal.
KPIs of AUB’s record-breaking income
The record-breaking income figures have translated into unprecedented highs for key performance indicators.
Return on equity (ROE) surged to 21%, a significant leap from 18.6%, while return on assets (ROA) climbed to 3%, up from 2.4%, showcasing the bank’s efficiency and profitability.
Amidst a persistently high interest rate environment, AUB’s net interest margin witnessed an 11% increase, reaching P16.8 billion. This growth was primarily driven by higher interest income generated from the bank’s expanding loan portfolio and strategic investment activities.
AUB’s loan portfolio, the primary engine of its revenue growth, expanded by an impressive 26%, reaching P245.4 billion in 2024 from P194.5 billion in 2023.
Credit quality also saw substantial improvement, with loan loss provisions plummeting by 74% and the nonperforming loan (NPL) ratio hitting a record low of 0.3%. The bank’s prudent risk management was further evidenced by its robust NPL coverage ratio of 113.7%.
The bank’s funding strategy proved highly effective, with low-cost deposits accounting for 71% of total deposits. Non-interest income also experienced a significant boost, rising by 48% to P4.1 billion, driven by improved foreign currency gains, recovery revenue, service charges, and other fees.
AUB poised to sustain growth momentum with National ID
Despite strategic investments in capital expenditures and increased remuneration, AUB managed to maintain operational efficiency, with operating expenses increasing by only 6% to P6.8 billion.
This resulted in a notable improvement in the cost-to-income ratio, which decreased from 36.2% to 32.8%.
AUB’s financial strength was further reflected in its robust capital position, with total equity increasing by 19% to P58.4 billion and total assets rising by 9% to P386 billion. The bank’s capital ratios significantly exceeded regulatory requirements, with an indicative capital adequacy ratio of 17.8% and an indicative common equity tier 1 ratio of 17%.
Looking ahead, AUB is poised to capitalize on the government’s National ID system to sustain its growth momentum. The bank’s proactive integration of the Philippine Statistics Authority’s (PSA) eVerify into its HelloMoney e-wallet has already yielded significant results, with nearly 94,000 new HelloMoney users added since February 3rd.
“We anticipate continued growth in our six million HelloMoney client accounts as we make the benefits of the National ID more accessible to more Filipinos,” Gomez emphasized.
AUB’s exceptional performance in 2024 underscores its strategic vision, operational efficiency, and commitment to innovation. As the bank continues to leverage digital technology and expand its reach, it is well-positioned to drive further growth and contribute to the nation’s economic development.