BIZ BUZZ: UnionBank to keep UBX
Not too long ago, UnionBank was close to signing a deal to sell its fintech arm UBX to Aboitiz Equity Ventures.
But the country’s newest banking blue chip (which edged out larger players in buying Citibank’s retail and consumer banking assets) has now decided it would no longer sell UBX, not even to its parent firm that is positioning itself to be a “techglomerate.”
When the sale was discussed at the board level, some of the directors said, sayang naman (it will be a waste), when the bank could grow UBX itself.
As such, a decision was made to “continue to roll out the platform,” UnionBank president Edwin Bautista told Biz Buzz.
He shared that UBX has now reached a breakeven position. As such, he said UBX could instead raise new capital by selling a minority stake to external passive investors.
If UnionBank wanted to bring in new partners/strategic investors today, Bautista reckoned that UBX could already fetch close to “unicorn” or $1 billion in market value.
However, he said it still won’t be optimal as fintech valuations in general had gone down. It’s not a good time and there’s no rush, he suggested. —Doris Dumlao-AbadillaLeading the digital pack
Meanwhile, Bautista proudly noted that based on the latest digital banking industry data, UnionBank subsidiary UnionDigital (the only one out six players that is affiliated with a traditional bank) has emerged as the market leader in terms of value of deposits generated and loans extended.
Benefiting from UnionBank’s ecosystem, the digital bank’s deposits hit P20 billion as of end-May this year, equivalent to 32 percent of the total deposit base of all digital banks. Its loan portfolio has grown to P13 billion, accounting for the lion’s share of 75 percent of the loans extended by all six players in this new banking category.
UnionDigital, which started operating only in July last year, announced that it was one of the fastest digital banks in the world to achieve profitability. It reported a triple-digit percentage growth in net income in the first half of 2023 compared with the second half of 2022. During the same period, its deposit base surged by 113 percent while the loan book grew by 126 percent, albeit these came from a low base.
At the Asian Banker Excellence in Retail Financial Services and Technology Innovation Philippines Awards 2023, UnionDigital also bagged the “Best Digital-Only Bank” award.
—Doris Dumlao-Abadilla
Plaudits for Citicore
Tycoon Edgar Saavedra’s Citicore Renewable Energy Corp., one of the country’s leading solar power producers, is on a roll as it was recently recognized for its corporate leadership and employee management. Citicore Renewable CEO Oliver Tan bagged the CEO of the year award and Asia’s best employer award during the recent 18th Employer Branding Awards. The event was held in Singapore and was hosted by India’s Employer Branding Institute.
“Citicore’s passion for excellence in pursuit of our organizational goals, innovative thinking and spirit of teamwork have been the bedrock upon which our success rests,” Tan said in his acceptance speech.
Tan, in particular, was recognized for his role in overseeing the company’s rapid expansion and its pioneering agro-solar program where high-value crops are planted alongside the solar panels to provide extra income to farmers. The best employer award was given because of the company’s “exceptional [human resources] practices, diversity and inclusion initiatives, employee training and development programs, and work-life balance policies.”
We expect Citicore Renewable to continue implementing its massive pipeline of solar projects as it lays the groundwork for its delayed “blockbuster” initial public offering.
—Miguel R. Camus INQ
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