Unionbank posts growth despite elevated expense

AMID interest rate hikes and “still elevated” expenses, Union Bank of the Philippines still managed to grow its net income in the first quarter of the year.

In a disclosure to the Philippine Stock Exchange (PSE), the Aboitizled Unionbank reported it was able to grow its net income by 30 percent to P3.4 billion in the January-to-March period of 2023.

Unionbank also reported that its net interest income grew 57 percent to P16.1 billion on the back of its acquisition of the Philippine consumer business of Citigroup Inc. as well as strong consumer-loan growth through City Savings Bank Inc. and UnionDigital Bank Inc.

“Our retail focus has allowed us to preserve our margins against a backdrop of continued policy rate hikes. We expect our core income to further improve throughout the year as we grow our consumer portfolio,”

Unionbank Executive Vice President and Chief Financial Officer Manuel R. Lozano was quoted in the disclosure as saying.

“Our expenses this year are still elevated due to one-offs, as we are effectively running on two systems to integrate the acquired Citi consumer business into ours. Once we complete the migration this year, we are confident that we will once again generate double digit Return on Equity,” Lozano added.

Cost of funds

UNIONBANK also reported that despite the expensive cost of funds, its net interest margin of 5.21 percent, increased by 54 basis points. Its earning assets also expanded by 28 percent to P894.9 billion yearon-year. Fees and other income, including from trading, increased by 82 percent to P4.2 billion compared to last year. The increase was driven by fees from digital and card-related transactions, the lender said.

The bank’s total assets as of March 31 reached P1.1 trillion, which was 30-percent higher compared to the same period last year.

Its net loans and receivables grew P490 billion, a 39-percent growth from last year. Total deposits increased 20 percent to P692.9 billion due to the growth of cash management and retail banking.

“The investments we made last year have exceeded our expectations. UnionDigital is already profitable after less than a year in operation. There is strong momentum in the acquired credit cards business from Citi,” Unionbank President and CEO Edwin R. Bautista was quoted in the statement as saying.

“New-to-bank card customers are at a record level. We are geared up to grow our retail banking busi- deliverable forwards following the cessation of the Libor benchmark, the removal of the 1 p.m. to 2 p.m. trading window and the change in maximum tenor.

The BSP said the country’s recovery was hampered by externalities from global developments and the depreciation of the Philippine peso.

These factors include the aggressive interest rate hikes by the US Federal Reserve; concerns over the impact of the Russia-Ukraine war; and imposition of tighter restrictions in China.

The CRPP facility serves as a tool for the effective management of foreign currency exposures amid exchange rate volatility.

It is a continuing facility that allows clients of universal and commercial banks (UKBs) to hedge their eligible foreign currency obligations/ transactions through non-deliverable forwards. Clients who wish to tap the CRPP facility may deal with their respective UKBs.

The UKBs shall then directly transact with the BSP for bank clients who wish to avail of the CRPP Facility. Only net payments shall be settled by BSP or the counterparty bank at the maturity of the contract.

Reset your work clock

ACASUAL search on the Internet about the habits of billionaires and millionaires indicate that many if not most of them wake up as early as 4 a.m. As an example, an August 18, 2022, article published by CNBC, said that “nearly two-thirds of successful CEOs say they wake up at 6 a.m. or earlier.”

There are also a number of scientific studies indicating that the brain functions better during this time rather t han later at night.

In spite of this, many managers and professionals, particularly the younger people work well into the night but, unfortunately, also wake up much later, some as late as noontime. Does this make sense?

The normal excuses I hear are that they are running after a deadline or there is just too much work to do. I can understand working a few hours more to meet a deadline or prepare for an important meeting or presentation; but only once in a while and certainly not on a sustained basis.

If you end up working the same number of hours but have different times of doing it, just try to shift into a more practical time unless your job demands you to work at certain hours due to dealing with others in a different time zone or you are in a night shift. Let’s say you have to work eight hours a day with a 1-hour break in between. Would you prefer to be working from 8 a.m. to 5 p.m. or 11 a.m. to 8 p.m.?

There are practical reasons for working during the core time of 8 a.m. to 5 p.m. Your clients, suppliers, business partners and government agencies are open this time so you can maximize the time you can access them. In addition, the full resources of your own organization will most likely be available during these normal office hours.

Furthermore, it is a myth that 14- hour work days on a prolonged basis is sustainable. Working every day from 8 a.m. to 10 p.m. for more than a week or so is impossible without compromising the quality of your work and your physical well-being, even if you work from home. There have been sufficient studies on the adverse effects of not getting 7 or more hours of sleep daily. Your family and social life is also bound to suffer if you have become a night owl. You will end up having less overlap time to be able to have meals together, enjoy each other’s company and spend quality time together. If you think about it, there really isn’t much to be gained from shifting to a later working schedule.

It is merely are illusion of hard work if you burn the midnight oil. Working at 100 percent of your potential for eight hours a day is certainly better than working at 50 percent of your potential for 14 hours a day.

Consider making the move to reset your work clock to more normal hours and I am certain it will improve the quality of your life, enhance your career and improve your performance. The choice is yours to make.

The views and comments of Dr. George S. Chua are his own and not of the BusinessMirror or the Financial Executives Institute of the Philippines (Finex). The author was 2016 FINEX President, 2010 to 2020 FPI President and currently an active entrepreneur with investments in fintech, broadcast, media, telecommunications and properties. Comments may be sent to georgechuaph@yahoo.com.

GCG taking in all inputs for LBP-DBP merger bid

ness. Our infrastructure is ready for scale. We have sufficient capital coming from the recent stock rights offering to further grow our earning asset base,” Bautista added.

Last year, Unionbank’s acquisition of Citigroup’s consumer business in the Philippines shored up the local lender’s short-term and longterm prospects, an international research firm said last January.

CreditSights, which was acquired by the Fitch Group, said the move was a “meaningful acquisition for a bank the size of Unionbank” and would not have been made possible if not for the strong corporate backing of the bank via the Aboitiz Group. The think tank also said their internal calculations showed that Unionbank’s acquisition of Citi will take the bank’s Common Equity Tier1 ratio down to approximately 13.5 percent. Cai U. Ordinario

THE chief of the Governance Commission for GovernmentOwned and -Controlled Corporations (GCG) said last Tuesday the agency is taking in everything thrown their way in relation to the proposed merger of the Land Bank of the Philippines (LBP) and the Development Bank of the Philippines (DBP).

“We welcome all resolutions, inputs and study that will provide the Commission better understanding and information to determine whether it is appropriate to merge the concerned government financial institutions [GFIs],” Commissioner Gideon D.V. Mortel was quoted as saying in a statement issued last April 25.

Mortel said the GCG has already submitted to the Office of the President a legal study that says the proposed merger of the two state-run lenders can be done through executive action.

Moreover, the study said that Republic Act (RA) 10149 (GOCC Governance Act of 2011)—among other legal bases, statutes and applicable jurisprudence—empowers the GCG to ascertain whether such GOCCs should be merged.

The proposed merger, however, is still under scrutiny.

In a resolution dated April 17, 2023, Sen. Ana Theresia “Risa” N. Hontiveros called for an investigation, in aid of legislation, into the proposal. Hontiveros raised concerns over the potential risks and benefits the merger may bring to the economy, the financial system and stakeholders.

Nonetheless, Mortel said any further inquiry on the proposed merger will provide better light on whatever determination GCG would have. He clarified that the study the GCG submitted to the President only resolves whether the merger requires legislation.

It does not indicate just yet any decision from the commission regarding the proposal, Mortel added.

“The Commission is still studying the positions of its stakeholders such as the Philippine Competition Commission, Commission on Audit, the Department of Finance, the LBP and the DBP.”

According to Mortel, they are still looking into the proposed merger’s various aspects, including operational efficiency, market reach, enhancement of new product lines and geographic reach. Raadee S. Sausa

By Jo Constantz Bloomberg News

POUR one out for your boss. Of all office workers, middle managers are reporting the highest levels of stress and anxiety and the worst work-life balance.

That’s according to new research by Slack Technologies Inc.’s Future Forum, which found a record 43 percent of managers say they’re burned out—the highest of any job level.

Slack polled more than 10,000 desk workers in the US, Australia, France, Germany, Japan and the UK.

“What we’ve seen, quarter after quarter, is that middle managers have been struggling,” said Sheela Subramanian, co-founder of Future Forum. They’re now under increasing pressure from higher-ups to deliver amid economic uncertainty and concerns about declining productivity, while at the same time hearing from their employees whose compensation is not keeping up with inflation.

And from the onset of the pandemic they’ve been tasked with navigating the challenges of leading remote and hybrid teams.

“The answer to so many initiatives, when it comes to compensation or performance management or now return-to-office, the answer always seems to be: ‘Well, the managers can do it,’” said Caroline Walsh, a vice president in the human resources practice at consulting firm Gartner. “But there is rarely that extra training to support the managers.”

Many managers are frustrated with return-tooffice mandates themselves, and don’t want to be the ones enforcing them.

“Their team’s saying, ‘Why do I need to do this? Why am I commuting to do Zoom calls all day?’” Subramanian said. “Middle managers are struggling to translate that.”

In the midst of these pressures, middle managers often lack the network that executives have and the community of rank-and-file employees, Subramanian said.

One regional manager at a financial services company Walsh spoke with recently said they felt caught in the middle, as enforcement of different return-to-office mandates for retail and office workers has kindled a burgeoning sense of unfairness within the organization.

Others have decided to throw in the towel.

Kyle Elliott, a career coach who works with Silicon Valley managers and executives, said several of his clients have decided to return to roles that don’t require supervising others.

“One client noted how they felt uncomfortable enforcing changes, such as return-to-office mandates, they didn’t believe in.”

Subramanian offered a few suggestions for companies looking to give their middle managers a boost: First and foremost, invest in coaching and community-building for managers, and allow supervisors more autonomy in deciding alongside their team what’s best in terms of the transition back into offices.

On a longer-term basis, it’s important to ask high-performers who want to move up if they actually want to be a manager, she said—and build parallel tracks for advancement for those that don’t.