Union Bank Of The Philippines · PSE:UBP
Union Bank Of The Philippines — 1H 2025 Earnings Presentation
36 slides from Union Bank Of The Philippines's earnings presentation, Aug 12, 2025
Slide 1: UnionBank Company Presentation
UnionBank Company Presentation August 12, 2025 Strictly Private & Confidential
Slide 2: Company Disclaimer
Strictly private and confidential Company Disclaimer You must read the following before continuing. The following applies to the information following this page, the oral presentation of such information at the meeting you are attending, the Q&A session and other materials which may be distributed a
Slide 3: Market Updates and Outlook
Strictly private and confidential Market Updates and Outlook 3
Slide 4: "Too-Late" Powell holds firm, leaves rates unchanged
“Too-Late” Powell holds firm, leaves rates unchanged • Dovish Statement, Hawkish Presser • Market pricing after FOMC: September cut down to 45% and just 1.5 cuts for the year • Powell: “Economy not behaving as if rates are restrictive” • Powell: “Expect to see more tariff impacts in inflation data”
Slide 5: NFP "Rigged," revisions reveal weakening jobs market
NFP “Rigged,” revisions reveal weakening jobs market • Headline NFP slightly weaker but market shocked by big revisions Actual Estimate • Two-month Payroll Revision down 258,000, Trump fires BLS Commissioner July NFP 73,000 105,000 AHE 3.90% 3.80% • Three-month average job growth down to 35k UER 4.2
Slide 6: Tariffs: Deals with major countries done, August 1 is hard deadline
Tariffs: Deals with major countries done, August 1 is hard deadline 6/9
Slide 7: Tariffs: Deals with major countries done, August 1 is hard deadline
Tariffs: Deals with major countries done, August 1 is hard deadline • Effective tariff rate expected to land at 18-20% • Japan: 15% tariffs in exchange for $550 billion investment • Japan will buy 100 Boeing planes and hike defense spending with US firms to $17 billion annually (from $14 billion) •
Slide 8: NFP revisions shifts sentiment
NFP revisions shifts sentiment July 30 (Post FOMC) August 6 (Current) 8/9
Slide 9: Yields rally, curve steeper on NFP revisions
Yields rally, curve steeper on NFP revisions 9/9
Slide 10: Asian EM CDS hover around year lows
Asian EM CDS hover around year lows 10/9
Slide 11: BSP: Rate cut this month more likely after July inflation report
BSP: “Rate cut this month more likely after July inflation report” • More accommodative monetary policy stance remains warranted after July inflation (0.9%) eased to nearly six-year low • BSP Governor Remolona: • “Rate cut this month more likely after July inflation report” • “Won’t have to follow F
Slide 12: Macro downside risks of a US tariff at 19%
Macro downside risks of a US tariff at 19% • PH won’t be hit much by 19% US Tariff according to Government Officials • BSP Governor Remolona - “modest” impact from the new US tariff on the Philippines • Economic Planning & Dev Secretary Balisacan - PH is not as reliant on trade as other nations and
Slide 13: July CPI cools to 0.9% y/y vs. 1.4% previous vs. 1.1% expected
July CPI cools to 0.9% y/y vs. 1.4% previous vs. 1.1% expected 2.8 0.9 • BSP: CPI is projected to average below the lower end of the target in 2025, primarily due to the continued easing of rice prices • BSP: 2026 and 2027 inflation is expected to trend higher but will remain firmly within the 2%-4%
Slide 14: PSA: main driver was electricity while food and non-alcoholic beverages also eased
PSA: main driver was electricity while food and non-alcoholic beverages also eased
Slide 15: PH to suspend rice imports for 60 days from September 1
PH to suspend rice imports for 60 days from September 1 • President Marcos issued the order after consulting with Cabinet members and upon the recommendation of Agriculture Secretary Francisco Tiu Laurel Jr. • DA Secretary Laurel Jr. has proposed capping the nation’s rice imports to roughly 750K ton
Slide 16: System liquidity at 1.1Tn, BTr raising funds via RTB
System liquidity at 1.1Tn, BTr raising funds via RTB • Jumbo GS maturities on Aug 12 and Sep 9 amount to 804Bn (516Bn + 288Bn) • BTr likely to issue at least 500Bn in this RTB, currently at 256Bn as of 08/05 • Eligible bonds for exchange amount to 566Bn, last year’s RTB sourced 42% from the exchange
Slide 17: 5Y–10Y bonds have flattened, bullish momentum on rate cut expectations
5Y – 10Y bonds have flattened, bullish momentum on rate cut expectations, overwhelming RTB demand PESO GS BVAL RATES MoM YTD Tenor End 2024 7/4/25 8/5/25 Change Change 3M 6.1600 5.5760 5.3976 -0.18 -0.76 6M 6.1000 5.6110 5.5518 -0.06 -0.55 1Y 6.0650 5.6500 5.6583 0.01 -0.41 2Y 6.0480 5.7290 5.7041 -
Slide 18: USDPHP Peaks at Php58.630 Before Sharp Pullback
USDPHP Peaks at Php58.630 Before Sharp Pullback • US Fed kept rates unchanged as widely expected and looks to future data for policy path. • Odds of a September cut rose to 90% from 40% post-FOMC after weak jobs data • USDPHP sharply lower below 58 bigfig in tandem with DXY falling below 100 to 98.7
Slide 19: Despite the pullback, USD/PHP still one of the weakest in the region
Despite the pullback, USD/PHP still one of the weakest in the region for the month DXY trades below critical 100 level after US jobs data disappoints
Slide 20: US equities at all-time highs, PSEi stuck in consolidation
US equities at all-time highs, PSEi stuck in consolidation
Slide 21: PSEi 6398 (-2.0% YTD) still at the bottom of the region
PSEi 6398 (-2.0% YTD) still at the bottom of the region
Slide 22: 1H-25 Financial Performance
Strictly private and confidential 1H-25 Financial Performance 22
Slide 23: Strong Revenue Underpinned by Customer Growth & NIM Expansion
Strictly private and confidential Strong Revenue Underpinned by Customer Growth & NIM Expansion Customer Growth Net Interest Margin (in #, Mn) 17.3 18.0 6.4% 16.5 6.0% 5.7% 5.5% 13.9 4.8% 61 4.5% 4.6% 11.8 9% bps 4.4% Industry* 8.9 7.1 2020 2021 2022 2023 2024 1H24 1H25 2020 2021 2022 2023 2024 1H24
Slide 24: UnionBank 1H25 Net Income at P3.3Bn
Strictly private and confidential UnionBank 1H25 Net Income at P3.3Bn UnionBank’s strong focus on the consumer segment continues to drive strong topline growth Net income is down 36% YoY, mainly due to a one-time, tax-related write-off and other front-loaded costs Excluding the impact of these, net
Slide 25: Net Interest Income Up by 14%, Mainly Driven by Wider Margins
Strictly private and confidential Net Interest Income Up by 14%, Mainly Driven by Wider Margins Net Interest Income Net Interest Margin (in PHP, Bn) YoY Cost NIM Yield 14% YoY 8.5% 8.6% 8.6% 8.6% 8.5% 31.3 6bps 27.5 5.7% 5.9% 6.0% 6.3% 6.4% 61bps 2.8% 2.8% 2.6% 2.2% 2.1% 67bps 3% QoQ 1H24 9M24 FY24
Slide 26: Strong Parent Net Interest Income Growth
Strictly private and confidential Strong Parent Net Interest Income Growth Net Interest Income Net Interest Margin (in PHP, Bn) YoY Cost NIM Yield 7.5% 7.6% 7.6% 7.7% 7.6% 1bps 19% YoY 5.4% 5.8% 6.0% 6.1% 6.2% 78bps 25.1 21.1 2.3% 2.2% 2.1% 1.7% 1.6% 63bps 1H24 9M24 FY24 3M25 1H25 5% QoQ Earning Ass
Slide 27: Loan Growth Driven by Parent Bank's Credit Cards and Personal Loans
Strictly private and confidential Loan Growth Driven by Parent Bank’s Credit Cards and Personal Loans Gross Loans, OSB Loan Mix (in PHP, Bn) Industry’s Consumer Loans ~ 21% Based on Q1-25 BSP Data YoY Institutional Retail (Parent) CSB, UD, Other Subs 528 527 521 532 3% 519 Cards, 22% 119 118 123 Con
Slide 28: Strategic Partnerships in Consumer Helping Drive Volumes
Strictly private and confidential Strategic Partnerships in Consumer Helping Drive Volumes 28
Slide 29: Steady Growth in CASA
Strictly private and confidential Steady Growth in CASA Total Deposits (Consolidated), OSB CASA Deposits (Consolidated), OSB (in PHP, Bn) (in PHP, Bn) CASA High-Cost YoY CASA CASA to Deposit 676 684 683 2% 666 653 700 66% 66% 70% 64% 64% 65% 600 60% 229 230 238 238 233 - 4% YoY 500 50% 447 454 445 4
Slide 30: Parent Bank Customer Transactions Driving Fee Income
Strictly private and confidential Parent Bank Customer Transactions Driving Fee Income Non-Interest Income YTD Fees & Others (in PHP, Bn) (in PHP, Bn) Fees & Others Trading Income 1H24 1H25 YoY YoY 8.9 Fees from Customer transactions, Trust, Wealth, and Banca posted strong growth 0.3 8.4 5% 0.2 Pare
Slide 31: OPEX Growth Driven by Volume and Continued Infrastructure Investments
Strictly private and confidential OPEX Growth Driven by Volume and Continued Infrastructure Investments Operating Expense Cost-to-income Ratio (in PHP, Bn) 8% 23.4 21.3 3% QoQ 59% 59% 57% 59% 59% 11.5 11.5 11.8 11.2 10.5 2Q24 3Q24 4Q24 1Q25 2Q25 1H24 1H25 1H24 9M24 FY24 3M25 1H25 Quarter-to-Date Yea
Slide 32: Credit Cost Higher but Expected to Normalize
Strictly private and confidential Credit Cost Higher but Expected to Normalize Credit Cost Loan Mix Parent Others Parent Consumer CSB & Other Subs UnionDigital Industry’s Consumer Loans ~ 21% Based on Q1-25 BSP Data 94bps 4.3% 0.4% 3.6% 3.4% 0.5% Cards, 22% 1.0% Consumer, Institutional, Salary Loans
Slide 33: Accelerated Credit Costs Resulted in Better Coverage Ratio
Strictly private and confidential Accelerated Credit Costs Resulted in Better Coverage Ratio NPL Ratio NPL Ratio (Consumer) NPL Ratio (Consumer Breakdown) UBP Industry UBP Industry UBP-Parent 2Q24 2Q25 7.4% 7.2% 7.2% 7.3% 6.9% 8.7% 8.3% Parent Consumer – Secured 10.3% 11.3% 8.1% 8.0% 7.4% Parent Con
Slide 34: Sufficient Capital Ratios to Support Growth
Strictly private and confidential Sufficient Capital Ratios to Support Growth Capital Adequacy Ratio Group (CAR) Common Equity Tier 1 Capital Ratio Group (CET1) Common Equity Tier 1 Capital Ratio Parent (CET1) 16.8% 17.3% 16.6% 15.6% 15.8% 15.6% 15.5% 15.1% 14.8% 14.9% 14.9% 14.7% 14.6% 14.9% 14.2%
Slide 35: Key takeaways and outlook
Strictly private and confidential Key takeaways and outlook Key takeaways Outlook Topline net revenues remained strong at Php 39.7Bn (+9.2% YoY), driven by sustained retail Topline momentum is expected to persist, driven by 1 customer expansion and wider margins. 1 strong growth catalysts (expanding
Slide 36: Thank You!
Strictly private and confidential Thank You! For comments and queries, contact us via: investorrelations@unionbankph.com Strictly Private & Confidential 36
Union Bank of the Philippines — 1H 2025 Earnings Presentation on 6ix