UnionBank ups bond plan to P100B
Union Bank of the Philippines might raise more funds from the debt market after doubling the size of its peso-denominated bond program to P100 billion.
The Aboitiz-led bank said in a regulatory filing its board of directors had approved the upsizing of the program. This was established in April 2019.
Back then, it had an initial size of P39 billion. This was later increased to P50 billion in October 2023.
“With the updated peso bonds program, the bank may, from time to time, offer, issue and sell the remaining balance of unissued and nonoutstanding unsecured and unsubordinated peso bonds,” UnionBank said.
The country’s ninth-largest bank last month announced plans to raise P30 billion under this program. It has yet to disclose a timetable.
UnionBank’s upsized bond program comes as the Bangko Sentral ng Pilipinas (BSP) continues its monetary policy easing cycle. So far, the BSP has slashed rates for overnight borrowing by 25 basis points this year to 5.5 percent.
Rate cuts typically make fixed-income securities like bonds more attractive to investors, as these often carry higher yields.
UnionBank has likewise confirmed it would raise up to $800 million from the offshore debt market. This is amid plans to boost the coffers of its digital banking arm.
$2-B program
The upcoming issuance is part of its $2-billion medium-term euro note program approved in October 2020. The program was also upsized from $1 billion in November 2017.
In the first quarter of this year, UnionBank’s net income tumbled by 28.5 percent to P1.4 billion. This was blamed on one-time, tax-related costs. Meanwhile, revenues grew by 4 percent to P19.4 billion.
Net interest income improved by 14.4 percent to P15.4 billion as the bank grew its consumer lending portfolio. The fastest segments were credit cards, personal loans and teachers’ loans.
Earlier this month, UnionBank and the Atram Group closed the merger of their trust units to form the country’s fourth-largest private asset management firm.
The Bangko Sentral ng Pilipinas had given its go signal for the merger of UnionBank Investment Management and Trust Corp. (UBIMTC) and Atram Trust Corp., forming a single entity with P485 billion in assets under management.
UnionBank acquired a 27.5-percent ownership stake in ATR Asset Management Inc., while the latter fully took over UBIMTC.
