Q1 2026 Union Bank of the Philippines Earnings Call Transcript
Key Points
- Union Bank Of The Philippines Inc (PHS:UBP) posted a net income of PHP3.8 billion in the first quarter, marking a 167% increase year on year.
- The bank's customer base grew by 1.3 million year on year, reaching nearly 19 million, with active digital users increasing by 500,000 quarter on quarter.
- Net interest income climbed to PHP17 billion, supported by a 34-basis-point improvement in net interest margins, which remain among the highest in the industry.
- The bank's fee income-to-asset ratio stood at 1.3%, more than double the industry average, driven by higher recurring fees from customer transactions.
- Operating expenses were relatively flat quarter on quarter, indicating improving operating discipline as revenue growth continues to scale, with a cost-to-income ratio improving to 57%.
- The geopolitical situation, particularly the Iran conflict, has caused market volatility, impacting securities trading and creating uncertainties for future performance.
- The bank's CET1 ratio experienced a significant drop from the fourth quarter of last year to the first quarter of 2026, partly due to the impact of the Iran conflict.
- Union Bank Of The Philippines Inc (PHS:UBP) remains cautious about potential tail-end implications from geopolitical uncertainties on asset quality and interest rates.
- Noninterest income declined on a quarter-on-quarter basis due to lower one-off income, despite an overall year-on-year growth.
- The bank's NPL ratios remain higher than the industry average, largely due to its consumer-focused portfolio, which carries higher credit costs.
Good afternoon. Welcome to Union Bank's earnings results briefing for the first quarter of 2026. My name is Jacqui De Jesus, and I will be your moderator for today's call. (Operator Instructions) This briefing will be recorded. By joining this session, you consent your name, voice, image, and chat comments being recorded for use and dissemination. For today's call, Johnson Sia, the Treasurer and Global Markets Head, will kick us off with Union Bank's macroeconomic and industry outlook. After that, Union Bank's CFO, Dmi Lozano, will present the financial performance. With that, let me turn you over to Johnson.
Good afternoon, everyone. So we just start with a quick economic update. We deliberately kept this short and simple because as we all know, economic developments are happening on a blow-by-blow basis. We don't know what we wake up to. So we prepared this last week. And so we see oil still above [110] since the closure. There was some hope over the
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