Banking

UnionBank Bolsters Digital Arm UnionDigital with US$32.5M Capital Infusion

UnionBank of the Philippines is significantly enhancing its investment in its digital banking division, UnionDigital Bank Inc., with a capital boost of P1.8 billion (US$32.5 million). This move, ratified by the bank’s board on November 24, aims to bolster UnionDigital’s ongoing operations and fuel its growth trajectory.

The decision to augment the financial foundation of UnionDigital likely reflects the commitment of UnionBank to improving its digital banking services. This is not the first instance of UnionBank amplifying its digital arm’s capital base; in June 2022, the bank had previously channelled an additional P2 billion, followed by a further P900 million investment in June this year.

“Please be informed that the board of directors of UnionBank, at its meeting held on Nov. 24, approved the infusion of additional capital of up to P1.8 billion in UnionDigital Bank to support ongoing business operations and allow it to deliver sustainable growth,” the listed bank said in a disclosure to the Philippine Stock Exchange (PSE).

This strategic direction aligns with UnionBank’s aspiration to intensify its lending frequency, featuring shorter repayment terms, thereby expanding its loan portfolio and enhancing financial inclusion for a broader spectrum of Filipinos.

UnionDigital is distinguished as one of six entities in the Philippines to receive a digital banking license from the Bangko Sentral ng Pilipinas (BSP). This limited group also includes fellow digital banking pioneers in the Philippines such as UNO Digital Bank, GoTyme (a Gokongwei Group venture), Maya Bank (backed by the PLDT Group), Overseas Filipino (OF) Bank (a Land Bank of the Philippines enterprise), and Tonik Bank.

The BSP’s Digital Payments Transformation Roadmap underpins these developments, with ambitious goals to transition half of the nation’s retail transactions to digital platforms and integrate at least 70% of Filipino adults into the formal financial system by 2023. This initiative underscores the growing prominence of digital banking in the Philippines’ financial landscape.