UnionBank eyes P30 billion from peso bond issuance

MANILA, Philippines — Union Bank of the Philippines is raising as much as P30 billion after it upsized its peso bonds program by 28 percent.

This, after the board of directors of the banking arm of the Aboitiz Group approved the increase in its peso bonds program to P50 billion from P39 billion.

The bank, in a disclosure to the Philippine Stock Exchange, said that it aims to issue up to P30 billion out of the program.

“The bank has yet to establish the timetable and other details for the issuance,” UnionBank said.

In April 2019, UnionBank announced plans to raise P39 billion from a bond sale to beef up its funding base, as well as to support business expansion plans and other general corporate purposes.

Of the program, the bank raised P11 billion last June via the first-ever digital peso bond issuance in the Philippines.

The bank has allocated P5 billion for its capital expenditures this year.

The amount will be used to finance the migration of the acquired Citi consumer banking business, as well as continued enhancements of its digital channels and feature builds to accelerate its aspiration of becoming a leading consumer bank.

“As the group’s banking business continues to lead the industry in innovation, it doubles down on its digital transformation,” the Aboitiz Group said in a statement.

UnionBank’s income was steady at P12.7 billion last year as revenues grew by 16 percent to hit a record high of P52.2 billion from P45.1 billion in 2021.

Last year, UnionBank focused on the seamless integration of the acquired Citi consumer business and the commercial launch of UnionDigital as one of the six digital banks licensed by the Bangko Sentral ng Pilipinas (BSP).

It ended up shelling out P72 billion for the acquisition of Citi’s retail banking business in the Philippines. As of end-June last year, the net asset value of Citi’s business stood at P26.7 billion plus a premium of P45.3 billion.

Last February, UnionBank raised its authorized capital by 71 percent to P60.31 billion from the current P35.31 billion to support growth and bankroll other general corporate purposes.

The proposed capital increase of P25 billion approved by the bank’s board would be divided into 5.03 billion common shares at P10 per share and 100 million preferred shares at P100 per share.

UnionBank has been raising funds, including the P12 billion from its stock rights offering last February, to fund the capital infusion to UnionDigital Bank, as well as for other general corporate purposes.

In May last year, the bank raised P40 billion through a stock rights offering to partially fund the acquisition of the retail banking business of global banking giant Citigroup Inc. in the Philippines.