Philippines – Union Bank of the Philippines (UnionBank) plans to fold its digital banking and fintech subsidiaries into the parent lender, according to a report from PhilStar. The Aboitiz-led bank wants to streamline operations and strengthen its digital banking services.
The bank’s board of directors has approved the planned integration of UnionDigital Bank and fintech subsidiary UBX, according to a disclosure to the Philippine Stock Exchange, as reported by PhilStar. The plan remains subject to regulatory approvals from the Bangko Sentral ng Pilipinas (BSP) and other authorities.
UnionBank said the move is part of a broader strategy to focus on its core businesses and improve operational efficiency. It also aims to consolidate the group’s digital capabilities under a single banking platform.
UnionDigital operates as the group’s digital banking arm. UBX, meanwhile, focuses on fintech solutions aimed at expanding access to financial services beyond traditional bank branches.
UnionBank President and CEO Ana Delgado said the integration would allow the bank to serve more customers while maximising the capabilities its subsidiaries have developed.
“By integrating UnionDigital and UBX with UnionBank, we are strengthening our digital proposition, creating greater efficiencies and accelerating our ability to serve more Filipinos at scale,” Delgado said.
She added that the consolidation would give customers access to a broader range of banking products and financial solutions through UnionBank’s existing digital platforms.
The bank also assured customers that services would remain available while regulators review the proposed integration.
“During the transition process, we are committed to ensure the least amount of disruption for our customers,” Delgado said.
Delgado added: “We will carefully guide their transition into UnionBank at the appropriate time.”
However, the bank has not disclosed a timetable for completing the integration, which still requires the necessary regulatory clearances.
The consolidation plan follows a 53 per cent increase in UnionBank’s net income to P9.9 billion in the first nine months. The bank cited stronger interest earnings, higher fee income and improved operating efficiency.
Net revenues rose by eight per cent to P65.5 billion, reflecting wider lending margins and higher transaction income from an expanding retail customer base that exceeded 19.5 million.
Net interest income increased by nine per cent to P51.9 billion, while the bank’s net interest margin improved by 34 basis points to 6.9 per cent.
UnionBank attributed the improvement partly to a five per cent increase in current account and savings account deposits, a relatively low-cost source of funding for banks.
Consumer loans accounted for 62 per cent of the bank’s total loan portfolio, nearly three times the industry average, reflecting its strong concentration in retail lending.
Meanwhile, non-interest income grew by five per cent to P13.6 billion, with fees and commissions climbing at the same rate to P11.9 billion.
Income from wealth management and bancassurance surged by 52 per cent and accounted for 18 per cent of total fee income.
