UnionBank consumer loans business driving loan growth

UnionBank [UBP 74.40, 2.1%; 24% avgVol] held a briefing yesterday, where the company talked about its first-half results, highlighted by the double-digit growth of its loan segments. UBP said that the consumer loans segment (personal loans) is growing faster than its institutional and wholesale loan segments. The quickest-growing sub-segments of the consumer loans segment are personal loans (business acquired from Citi), digital loans from UnionDigital, and the motorcycle lending business from Citi Savings Bank. UBP also guided that the integration of the Citi Group assets was progressing well, with all metrics (total assets, loans, AUM, and deposits) higher than what was originally modeled prior to the acquisition. UBP said that its main focus is to complete the migration of Citi legacy accounts to UBP systems and products, and to continue driving customer experience improvements that have led to a 22% decline in complaints.

 

MB bottom-line: UBP’s aggression is being rewarded. They took a huge swing during a time that was loaded with uncertainty for parts of the banking industry, and it looks like they’re going to come out on the other side much larger and in a great position to continue benefitting from this trend toward personal lending. As I mentioned yesterday, I am not a bank analyst, so there may be some nuanced metrics that I don’t see that might raise some red flags for some folks, and if that’s the case, I’d love to hear from you so that I can spread that learning across the readership. From this outsider’s perspective, UBP is really punching well above its weight class. 

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