UnionBank hikes capital by 70% to P60.3B
MANILA -Aboitiz-led Union Bank of the Philippines is ready to pursue new expansion opportunities after securing regulatory approval for a 70-percent capital increase more than a year after taking over the Philippine assets of US banking giant Citi.
This will hike UnionBank’s capital base to P60.3 billion amid plans to deepen its consumer portfolio and the aggressive growth of its digital banking arm.
“The increase in the authorized capital stock will be used to support growth and for general corporate purposes,” UnionBank said in a stock exchange filing on Wednesday.
The capital hike was approved by the Securities and Exchange Commission on Dec. 5, the filing added.
UnionBank is moving aggressively to capture a larger share of the consumer segment following the P72 billion take-over of assets of Citi.
Edwin Bautista, the bank’s CEO, said last October the deal positions UnionBank for faster growth in the coming years.
“For this year our priority is not to maximize income. Our priority is to maximize customer acquisition, to maximize retention, and to maximize usage so we are spending to make sure that happens,” Bautista said of Citi acquisition.
UnionBank is also hiking investments in UnionDigital Bank, announcing last Nov. 24 the infusion of another P1.8 billion into the subsidiary.
This was to “support UnionDigital’s ongoing business operations and allow it to deliver sustainable growth”, a previous stock exchange filing showed.
The bank recently tapped the bond market to further support growth plans.
It raised P18.2 billion from the sale of 1.5-year and three-year bonds, which was several times oversubscribed by retail and institutional investors.
During the first nine months of 2023, UnionBank reported a 19 percent profit drop to P8.1 billion as higher expenses due to the Citi takeover weighed on earnings.
Net revenues grew 48 percent to P52.8 billion as net interest income grew by 34 percent to P37.3 billion.
