PSE Circular for Brokers No. 030-98

February 3, 1998 PSE CIRCULAR FOR BROKERS NO. 030-98 PRESS RELEASE 2 February 1998 UnionBank Meets Goal of P1 . 2 Billion Income For 1997 Despite a difficult operating environment, UnionBank of the Philippines achieved its goal of posting P1.2 billion consolidated net income for the year 1997. This is a 25% growth from year-ago level. Fourth quarter net income stood at P299.4 million, a 26.2% increase compared to the P237 million registered in the same period in 1996. Last year, the bank's management also set aside a very hefty amount for loan-loss provisions. "In view of the increased systemic risk arising from the regional currency turmoil, we increased our reserves by a hefty 440.8% to P400.2 million during the period and shall continue to increase significantly our loan-loss reserves as a defensive measure in managing our financials," said President and Chief Operating Officer Victor B. Valdepeas. The return on shareholders' capital or equity (ROE) increased to 17.5% compared to 16.6% in 1996. UnionBank was able to raise an estimated P1.5 billion additional capital from the stock rights offer held in December last year. The capital base rose by 43.5% to P9.1 billion year-on-year. The capital-to-assets ratio increased to 16.8% from 13.5% in 1996, making UnionBank one of the best capitalized banks in the country. aisadc Total resources grew by 10.3% to P54.3 billion year-on-year. Reflecting the bank's defensive risk management position was the decline in the bank's loan portfolio by 13.4% to P29.2 billion. Total deposits continued to increase by 16% to P23.9 billion.