UnionBank eyes $800-M debt foray for digital bank
Aboitiz-led Union Bank of the Philippines (UnionBank) will raise up to $800 million from the offshore debt market amid plans to boost the coffers of its digital banking arm.
UnionBank said in a regulatory filing on Monday that the planned issuance was part of its $2-billion euro medium-term note program (EMTN) approved in October 2020. The program was upsized from $1 billion in November 2017, and it has so far raised $800 million.
EMTNs, which are issued outside the United States and Canada, give issuers the flexibility to tailor their debt issuance to their specific funding requirements.
At the same time, UnionBank said its board of directors had approved a proposal to double its peso-denominated bond program size to P100 billion.
The country’s ninth largest lender aims to issue up to P30 billion under the program.
It has yet to disclose details about both issuances, including the issue date.
This comes as UnionBank plans to infuse up to P1.2 billion in additional capital into UnionDigital Bank Inc. to support the latter’s operations and “enable it to deliver sustainable growth.”
Launched in 2022, UnionDigital was meant to drive the bank’s digital loan expansion by providing access to credit and loan applications through its mobile app.
UnionBank initially invested P900 million into its digital banking arm in October 2023, and another P1.8 billion in November that year.
Last September 2024, UnionBank also injected an additional P1.6 billion in hopes of widening its consumer portfolio.
The bank’s earnings in 2024 surged by 31 percent to P12 billion as it began realizing investments from taking over US banking giant Citi’s local consumer business.
Its top line also jumped by 12.4 percent to a record P79.5 billion on its “retail-focused strategy.”
Net interest income reached P58 billion, up by 11.6 percent.
Following its acquisition of Citi’s consumer unit, UnionBank’s consumer loans now account for 61 percent of its loan portfolio, or nearly thrice the industry average, it said.
