Union Bank to redeem P1.29-B of debt notes

MANILA — The Aboitiz-led Union Bank of the Philippines is set to redeem by September 2011, P1.29 billion worth of debt notes qualifying as tier 2 or supplementary capital.

Union Bank also recently disclosed that it had grown its second quarter net profit by 57.7 percent to P2.15 billion from a year ago on the back of robust consumer lending and trading gains.

This brought net profits for the January to June period to P2.86 billion, up by 28.8 percent from the same period in 2010.

In a separate disclosure on Monday, Union Bank said its board of directors had approved the exercise of the bank’s call option on the 10-year tier 2 notes issued in 2006.

The bank had the option to redeem these notes, which had a coupon rate of 9.5 percent, on the fifth year or by Sept. 26, 2011.

In the first semester of the year, the bank had also put up more buffer for potential loan losses in anticipation of a volatile second semester. Impairment provisions for the first half were expanded to P473.76 million, more than double the P211.67 million buffer set aside a year ago. /INQUIRER