AUB increases loan loss reserves by P638 million in Q1 2021

While COVID-19-related lockdown persists and the economy continues to reel from the impact of the global pandemic, Asia United Bank (AUB)has set aside an additionalP638 million in loan loss provisions in the first quarter of 2021. This brings its loan loss coverage to 3.4% of its total loan portfolio.

The additional loan buffer represents a six fold increase from P93 million in the same period last year. It was also the primary reason the AUB Group’s consolidated net income result for the first three months of the year fell to P736 million or 38% lower than P1.2 billion a year ago. The net income translates to a return on equity of 8.5% and return on assets of 1.0%. The group’s first-quarter total assets grew 14% to P313 billion from P274 billion, previously.

Amid the lockdowns that discouraged clients from visiting bank branches, AUB managed to generate total deposits of P261 billion, a 20% increase from the previous year, with low-cost CASA deposits significantly driving the growth. The share of CASA deposits to AUB’s total deposit base rose to 73%from 65%, previously.

“This is solid proof that our steady investment in our digital channels has been paying off,” AUB president Manuel A. Gomez said.

Before the pandemic led to wider acceptance of digital platforms, AUB has already been enhancing its AUB Mobile App to enable fund transfers and the adoption of the national QR code for convenient fund transfers and payments via QR across banks. Last week, it rolled out QR Ph to its customers and merchants under its AUB mobile app, HelloMoney e-wallet, and AUB PayMate digital payment acceptance platform, making AUB one of only three “issuer-acquirer” participants ready to use and accept the national QR code by May — months ahead of the Bangko Sentral ng Pilipinas’ September deadline.

The growing reliance on digitalization also helps AUB keep its costs down. In the first quarter, operating expenses were down by 4% as the bank continues to demonstrate operational efficiency with a cost-to-income ratio of 47.2%.