UnionBank eyes P10B from rights offer

MANILA  —Aboitiz-led Union Bank of the Philippines is returning to the stock market to raise as much as P10 billion partly to support its digital banking arm, UnionDigital.

In a stock exchange filing on Monday, UnionBank said its board of directors approved plans for a stock rights offering, although details such as the timing and the number of shares to be issued are yet to be finalized.

“Net proceeds will be used to fund the capital infusion to UnionDigital, projected retail loan availments, and/or for general corporate purposes,” UnionBank said.

The banking giant also saw profits fall 27.6 percent to P9.2 billion in 2023 as expenses soared due to the ongoing integration of Citi Philippines’ consumer business.

READ: UnionBank hikes capital by 70% to P60.3B

UnionBank’s operating expenses for the year jumped 43 percent to P45 billion. At the same time, the Citi acquisition bolstered net revenues by 36 percent to P71 billion.

Net interest margin also increased to 5.5 percent from 4.8 percent the previous year.

“The higher margin is attributable to the remarkable growth in consumer lending,” UnionBank said.

Diversified portfolio

Consumer loans accounted for 58 percent of the total loan portfolio in 2023. This was a diversified portfolio of “credit cards, mortgage loans, personal/salary loans, and vehicle loans.”

“We have surpassed our customer growth targets. Our customer base is now close to 14 million,” said UnionBank chief financial officer Manuel Lozano.

READ: UnionBank bets on consumer loan growth amid rate hikes

The bank ended the year with total assets of P1.1 trillion, up 5 percent, while net loans and receivables expanded by 10 percent to P527 billion.

On the other hand, total deposits were stable at P713 billion.

“Investments in our new businesses are yielding highly promising results,” UnionBank president and CEO Edwin Bautista said. INQ