UNION Bank of the Philippines reported a profit dive for the first three months of the year, but said it was the company’s “deliberate strategy to mitigate the downside implications of negative market environment.”

The bank, a partnership with Aboitiz Group, Insular Life and Social Security System, posted a P602.5-million net income for the first quarter of the year, lower than the P1.63-billion net income it posted last year.

Its total operating income declined by about 40 percent to P1.91 billion from the previous year’s P3.14 billion.

The bank said that such was deliberate since it had less exposure on the capital market, and partly due to the base effect arising from one-off gains from nonrecurring transactions in the previous year.

The bank said it may have lower net income but it sees an increased lending resulting from more aggressive credit positioning.

Its net interest income increased by 21 percent to P1.25 billion, while operating cost was reduced by about 8 percent to P1.21 billion.

Its net loan portfolio expanded by 18 percent to P47 billion after it had expanded in corporate, commercial and consumer finance businesses.

“Our strategy of seeking appropriate risk-adjusted return is paying off in this volatile environment, and we will continue to optimize the value of business opportunities to the quality and growth of our profitability,” Justo A. Ortiz, the bank’s chairman and chief executive officer, said in a disclosure.

UnionBank’s asset base stood at P160.13 billion for the period, while capital base rose by 24 percent to P26.47 billion due to strong internal capital generation and proceeds from the follow-on equity offering in the first semester of 2007.

The bank’s capital adequacy ratio was at 14.6 percent inclusive of credit, market and operational risk charges. Regulators have set the minimum ratio of 10 percent.

In 2006 UnionBank, the country’s ninth-largest by assets, bought International Exchange Bank for around P13.5 billion.

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AFTER the merger of Philippine National Bank (PNB) with Allied Bank, both owned by the Lucio Tan Group of Companies, the pace of consolidation will likely slow down but not stop, the Bangko Sentral ng Pilipinas (BSP) said Friday.

THE chairman of the Senate Committee on Banks and Financial Institutions has asked Congress to expedite approval of a bill granting supplementary powers to the Bangko Sentral ng Pilipinas (BSP) to boost enforcement of international best practices in banking supervision through amendments in the BSP charter.

UNION Bank of the Philippines reported a profit dive for the first three months of the year, but said it was the company’s “deliberate strategy to mitigate the downside implications of negative market environment.”