The bank has set aside P1.3 billion as provision for loan losses for the 1st quarter of 2020, higher than the P174.6 million in 2019.
The amount will be used to cover potential bad loans and consumer defaults, which are likely in a recession or period of negative economic growth.
“We deemed it prudent to set aside higher provisions for the year given the uncertainties brought about by this unprecedented health crisis,” said Jose Emmanuel Hilado, UnionBank chief finance officer and treasurer.
“Our solid financial performance and capital base shall provide us the cushion to withstand the economic impact of the enhanced community quarantine.”
Bank of the Philippine Islands (BPI) earlier reported that it has increased its buffer for bad loans.
For the 1st quarter of 2020, BPI booked P4.23 billion in provisions for loan losses, 2.4 times more than the P1.8-billion buffer set aside during the same period in 2019.
Meanwhile, BDO Unibank said it maintained its conservative credit and provisioning policies, setting aside provisions of P2.3 billion.
UnionBank recorded a net income of P2.6 billion in the first 3 months of 2020, a 22% jump from the same period last year.
Revenues were up by 37% to P9.5 billion, driven by net interest income which grew 47% to P6.8 billion.
Customer loans went up by 24% to P391.8 billion due to the expansion of commercial lending, consumer loans, and small and medium enterprise banking.
“UnionBank is committed to support the economy and its customers by ensuring access to liquidity and other financial needs amid this crisis. Our branches remain open to the public and our digital channels are highly accessible,” said UnionBank president and chief executive officer Edwin Bautista. – Rappler.com