Aboitiz-led Union Bank of the Philippines is preparing to roll out its contender in the emerging digital banking space after obtaining its license to operate.
In a stock exchange filing on Thursday, the lender said subsidiary UnionDigital Bank Inc. was issued a certificate to operate by the Bangko Sentral ng Pilipinas (BSP) on July 12.
“This certificate is the final stage in the three-stage digital bank license application process,” it said.
The BSP earlier capped the number of digital bank applications to six players. These were GoTyme, Maya Bank, Overseas Filipino Bank, Tonik Bank, UNObank and UnionDigital.
P2B infusion
Thus, UnionDigital would be the fourth digital bank to operate after Land Bank of the Philippines’ Overseas Filipino Bank, Tonik and Maya.
Unionbank earlier approved the infusion of another P2 billion into UnionDigital ahead of its planned launch within the second half of 2022.
Digital banks are a new category of lenders created by the BSP to reach the vast majority of Filipinos without a bank account.
This means they can offer a host of financial services that regular banks usually provide, including savings and loans, but without having a physical branch network since business is conducted online.
According to Maybank Securities, the rise of digital banking and foreign entrants was positive for the broader banking sector.
“We still believe the market is big enough for both traditional and digital banks to coexist, especially as there is still huge room left for deposit account holders to grow,” Maybank said.
“The presence of foreign digital banks will help the banking sector by speeding up digital transformation but we do not expect any material negative hit to Philippine banks’ growth,” it added.