UnionDigital poised to be a pickier lender
UnionDigital Bank will be pickier in granting loans to its clients to maintain the improvement in its asset quality while also growing its client base.
Danilo Mojica II, UnionDigital president and CEO, told reporters on Wednesday they would make loans more accessible for Filipinos while also being more “disciplined” in lending.
”The way to prosperity is for people to not be afraid of borrowing so that they can use it for their needs, especially for their businesses and ancillary needs as individuals,” Mojica said during a press briefing.
According to him, UnionDigital, the digital banking arm of Union Bank of the Philippines, will use alternative data to get to know their clients applying for loans. These include records of timely payment of utility bills in the absence of credit scores, which are tied to credit cards.
Last year, UnionDigital saw its gross nonperforming loans (NPL) ratio, a gauge of borrowers’ capacity to repay loans, settle at 22.86 percent from 28.35 percent previously.
This is significantly higher than the industry average of 3.27 percent in 2024. A higher NPL ratio can translate to lower profitability, as nonpayments increase provisioning costs.
Although he did not disclose exact figures, Mojica said, “I can safely say that we’re well within single-digit numbers for NPL,” Mojica said.
Launched in 2022 specifically to drive Unionbank’s digital loan expansion, UnionDigital currently has more than 1 million users, around 453,000 of whom are availing loans. Clients usually borrowed P30,000 to P50,000 each, with tenors ranging from three to nine months, Mojica said.
Despite the stricter approach, the CEO noted that loan growth would not be significantly impacted, especially with new products in the pipeline.
