Union Bank Of The Philippines · PSE:UBP
Union Bank Of The Philippines — 9M 2024 Earnings Presentation
26 slides from Union Bank Of The Philippines's earnings presentation, Nov 4, 2024
Slide 1: Briefing 4 November 2024
Briefing 4 November 2024 2:30 PM PHT UnionBank : oo | GT2025 Together we are building the Philippines’ first techglomerate
Slide 2: Disclaimer
Disclaimer This presentation and the information contained herein (this "Presentation") are the sole and exclusive property of Aboitiz Equity Ventures (“AEV”) and shall only be used for the purpose intended herein and may not be used, published or redistributed without the prior written consent of A
Slide 3: Agenda
Agenda Dominic Banal 1. Macroeconomic and Industry Outlook Global Markets - Trading Head Dmi Lozano 1. Financial Performance Chief Financial Officer
Slide 4: Macroeconomic and Industry Outlook
Macroeconomic and Industry Outlook
Slide 5: BSP started easing cycle with Aug cut and RRR reduction; 3 cuts expected for 2024
BSP started easing cycle with 15 Aug cut and RRR reduction; 3 cuts expected for 2024 • Another 25bps rate cut possible in December; a 50bps reduction is unlikely says BSP Governor Remolona • A half-point rate cut in December would be “too aggressive” • “We prefer to take baby steps in terms of adjus
Slide 6: September CPI slumped to 1.9% YoY vs. 2.5% expected, 3.3% in August
September CPI slumped to 1.9% YoY vs. 2.5% expected, 3.3% in August 2.4% 1.9% • PH headline inflation further slowed down to 1.9%, the lowest since the 1.6% recorded in May 2020
Slide 7: BVAL curve higher by 10-16bps m/m
BVAL curve higher by 10-16bps m/m • Players shed inventory on less aggressive rate cut bets • BSP Governor Remolona reiterates measured approach (baby steps) in easing
Slide 8: Regional currencies succumb to dollar strength
Regional currencies succumb to dollar strength USD surge as rate cut bets recede
Slide 9: USD/PHP rises on US economic resilience and geopolitical factors
USD/PHP rises on US economic resilience and geopolitical factors 59.00
Slide 10: US market erases aggressive rate cut bets
US market erases aggressive rate cut bets •Fed Speak leans cautious after strong NFP • Waller: “Central bank should cut rates with caution at a deliberate pace” • Kashkari: expects “further modest reductions”, “there’s no sign of a rapid weakening in labor” • Bostic: “Not in a rush to get to neutral
Slide 11: Market expecting 1.6 cuts; In line with Fed Dots
Market expecting 1.6 cuts; In line with Fed Dots Current Market Expectations Fed Dots
Slide 12: USTs back to June levels as rally fizzles out
USTs back to June levels as rally fizzles out
Slide 13: Fed cuts combined with long end selloff means carry potential for EM credit
Fed cuts combined with long end selloff means carry potential for EM credit
Slide 14: US Elections on Nov 5 expected to be high volatility event
US Elections on Nov 5 expected to be high volatility event • National polls still have elections as a close call (49% Trump vs 48% Harris) • Betting polls have Trump’s odds of winning at 64% (Polymarket) and 58% (Predictit) • At July peak, Trump odds were at 70%
Slide 15: Financial Performance 9M24
Financial Performance 9M24
Slide 16: Sustained growth in customer count and revenues
Sustained growth in customer count and revenues
Slide 17: UnionBank 9M24 net income at PHP8.6b
UnionBank 9M24 net income at PHP8.6b
Slide 18: Net interest income rose by 14% YoY due to higher margins
Net interest income rose by 14% YoY due to higher margins
Slide 19: Loan growth driven by credit cards and CitySavings
Loan growth driven by credit cards and CitySavings
Slide 20: Steady growth in CASA
Steady growth in CASA Total Deposits (Consolidated) CASA Deposits (Consolidated) (Outstanding Balance in PHP Bn) (Outstanding Balance in PHP Bn) @CASA Time Deposits —*—Share of CASA to Total Deposits YoY 729 699 64% 64% 688 60% 62% ° . 669 662 WV %% 56% bets rid ae > oe A 4% YoY 317 283 261 238 Ee)
Slide 21: Parent bank customer transactions continue to drive fee income
Parent bank customer transactions continue to drive fee income
Slide 22: OPEX mainly driven by volume growth
OPEX mainly driven by volume growth
Slide 23: Temporary rise in credit cost largely due to UD
Temporary rise in credit cost largely due to UD
Slide 24: NPL ratio is reflective of our loan mix
NPL ratio is reflective of our loan mix
Slide 25: Sufficient capital ratios to support growth
Sufficient capital ratios to support growth
Slide 26: Summary
Summary Key Takeaways Outlook This upward trend is expected to continue as we eventually reap the benefits from the growth of our consumer business. This will translate to solid topline growth and net income expansion. In 3Q 2024 alone, the bank generated a net income of P3.5 billion, up by 78% YoY
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