UnionBank infuses P300 million into digital unit

MANILA, Philippines — Aboitiz-led Union Bank of the Philippines has injected P300 million in capital to its digital arm from the proceeds of its stock rights offering (SRO) as part of efforts to sustain its expansion.

In a disclosure to the Philippine Stock Exchange, UnionBank said that it infused an additional P300 million into UnionDigital Bank Inc.

As of September,UnionBank has depleted all of the P11.86 billion in proceeds from the SRO it conducted in February.

Broken down, UnionBank used the bulk of the proceeds at P10.96 billion to provide loans to its corporate and individual clients. Further, the bank placed P600 million in government securities pending a decision for their deployment.

Prior to this, UnionBank invested P900 million of the proceeds on government bonds. However, the bank withdrew P300 million and infused it into UnionDigital Bank on Sept. 29.

In September, the Bangko Sentral ng Pilipinas (BSP) gave its approval to UnionBank to proceed with its plan to pump P900 million into its digital unit.

As of May, UnionDigital Bank has issued more than P13 billion in loans, taking up 75 percent of the lending market among digital-only banks.

As such, UnionDigital Bank registered a triple digit growth in net income in the first semester of this year compared to the second half of 2022. The bank also expanded its deposit base to P20 billion, cornering 25 percent of customers in the digital-only space.