Union Bank invested in the digital bank by P2 billion in equity
June 28, 2022
Additional P2 billion in equity is invested in the digital bank arm by Union Bank.
The listed bank disclosed to the Philippine Stock Exchange (PSE) that the capital infusion to UnionDigital Bank Inc. had received board approval.
The UnionBank of the Philippines, headed by Aboitiz, is providing up to P2 billion in additional capital to the soon-to-be-established, fully-owned UnionDigital Bank Inc.
The listed bank disclosed to the Philippine Stock Exchange (PSE) that the capital infusion to UnionDigital Bank Inc. had received board approval.
The Monetary Board has also authorized UNO Digital Bank, GoTyme of the Gokongwiei Group and Tyme, Maya Bank of the PLDT Group, Overseas Filipino (OF) Bank of the state-run Land Bank of the Philippines, and Tonik Bank in addition to UnionDigital Bank as digital banks.
According to UnionBank President and CEO Edwin Bautista, Union Digital is the bank’s attempt to cost-effectively and more broadly access the country’s untapped retail market.
“The second half of the year is still the target launch date for our digital bank UnionDigital. To fulfill crucial conditions for the beginning of our operations, we are closely collaborating with the regulators, said Bautista.
The UnionDigital Bank’s Articles of Incorporation and By-Laws were approved by the Securities and Exchange Commission (SEC) in November of the previous year. In order to become incorporated, UnionBank purchased P1 billion worth of 100 million new common shares of UnionDigital Bank at a par value of P10.
Digital banks, in contrast to traditional brick and mortar financial institutions, operate entirely online and process all of their financial products and services.
Along with providing conventional savings and time deposit accounts, digital banks also increase MSMEs’ access to credit by providing mobile-friendly lending and investing options.
By 2023, the Bangko Sentral ng Pilipinas (BSP) hopes to have at least 70% of adult Filipinos enrolled in the formal financial system and to have moved 50% of all retail transactions in the nation to electronic channels
Due to the absence of exceptional trading gains this year, UnionBank’s net income decreased by 44.7% to P2.6 billion in the first quarter from P4.7 billion in the same time previous year.
Union Bank’s treasurer and head of corporate planning services, Jose Emmanuel Hilado, previously stated that the publicly traded bank is optimistic in its ability to maintain the momentum of its recurring income, which increased by 21 percent from January to March of this year.
“While the prolonged confrontation between Russia and Ukraine may have a negative impact on consumer and investor confidence, we believe that the nation’s economic fundamentals are solid enough to withstand the difficulties ahead. Because of this, Hilado stated, “We continue to be hopeful that rising credit demand and spending habits would enable us to maintain momentum in our recurring revenue for the remainder of 2022.
According to Hilado, the Aboitiz-led bank is confident that the nation can maintain its economic recovery.
If the pandemic is over, we are hoping that the economic advances since 2021 are permanent. “The optimism generated by the reopening of the economy is palpable,”
In the first quarter, Union Bank’s total assets increased by 13% to P844.4 billion from P747.3 billion in the corresponding quarter last year.
