UnionBank gets BSP OK to hike capital to P35.3 billion

MANILA, Philippines — Aboitiz-led Union Bank of the Philippines received the approval of the Bangko Sentral ng Pilipinas (BSP) to hike its authorized capital to fund future growth opportunities.

In a disclosure to the Philippine Stock Exchange (PSE), UnionBank said the central bank has approved the amendments to the bank’s Articles of Incorporation to increase its authorized capital stock to P35.31 billion from P23.11 billion.

The increase of P12.19 billion is equivalent to 1.22 billion common shares with a par value of P10. The bank also declared a 25 percent stock dividend equivalent to 304.84 million shares worth P3.05 billion.

“As already disclosed, UnionBank will have a stock dividend and the rest to fund future growth opportunities,” UnionBank president and chief executive officer Edwin Bautista told The STAR.

Last June 25, the board of directors of the Aboitiz-led bank approved the declaration of the 25 percent stock dividend to fund the required 25 percent of the increase in authorized capital stock.

The stock dividend will be sourced from the approved increase in authorized capital stock and paid to stockholders as of the record date and payment date to be fixed after all regulatory approvals have been secured.

The bank’s stockholders approved the planned hike in authorized capital during a special meeting conducted virtually last Aug. 11.

Earnings of UnionBank jumped by nearly 85 percent to P8.31 billion in the first half from P4.5 billion in the same period last on the back of the double-digit growth in revenues as well as sharp drop in provision for potential loan losses.

The bank’s net revenues grew by 15.4 percent to P25.5 billion from January to June compared to P22.1 billion in the same period last year.

Its provision for bad debts fell by 56.4 percent to P3.05 billion in the first half from P6.99 billion in the same period last year as the bank’s non-performing loan (NPL) ratio improved to 4.7 percent after surging to 5.1 percent in end 2020.

The assets of UnionBank stood at P733.6 billion in end-June, down from P751.5 billion in the same period last year.

UnionBank is the country’s ninth largest bank in terms of assets as of end 2020.