Union Bank of the Philippines is injecting another P1.6 billion into its digital banking arm in hopes of further widening its consumer portfolio through digitalization.
In a stock exchange filing on Tuesday, the Aboitiz-led bank said its board of directors had approved the infusion of additional capital into UnionDigital Bank Inc.
This was meant to support UnionDigital’s “ongoing business operations and allow it to deliver sustainable growth, subject to the applicable regulatory approvals,” UnionBank added.
In November last year, UnionBank also infused P1.8 billion into UnionDigital, following an initial P900-million investment the previous month.
70-percent increase
UnionDigital was launched in 2022, or the same year that the country’s ninth-largest bank acquired the Philippine retail assets of US-based banking giant Citi for P72 billion.
UnionBank completed the migration of Citi’s consumer business into its systems in March this year. This involved the transfer of around 1.5 million customer and transaction records.
Before the end of 2023, UnionBank secured regulatory approval for a 70-percent increase in its capital in relation to its Citi takeover.
The hike raised UnionBank’s authorized capital stock to P60.3 billion to support growth and “general corporate purposes,” it said.
Accommodate needs
Edwin Bautista, UnionBank president and CEO, said earlier this year that they would make sure to replicate Citi’s features to accommodate the needs of the latter’s former clients.
The company is also working on intensifying marketing activities to ensure that customers stay with UnionBank.
In the January to June period, higher costs gnawed on the bank’s earnings, with net income slipping by 17 percent to P5.1 billion.
This was despite a 2.4-percent decline in operating expenses to P21.6 billion and the 8.3-percent improvement in revenues to P37.3 billion.
While it had already lowered information technology expenses after the Citi migration, UnionBank said this was offset by customer acquisition-related costs.
Despite the lower first-half earnings, the bank’s second quarter profits increased by more than 50 percent.