Digital Banking

UnionDigital Bank to Grow Loan Portfolio to ₱40 Billion, Introduce Virtual Cards

UnionDigital Bank, Inc., the digital banking division of Union Bank of the Philippines, aims to elevate its loan portfolio to nearly P40 billion this year through the introduction of new financial products, including an expanded loan selection and virtual cards. This initiative is in line with an anticipated growth in customer numbers.

By the end of 2023, the UnionDigital Bank gross loan portfolio stood at P13.9 billion which is significantly higher than previous years, reflecting robust growth. It had also recorded a loan-to-deposit ratio of 69%, an increase from 58% the prior year, highlighting its progress towards greater profitability.

The digital bank presently offers cash loans on its mobile app, with the intention of boosting alternative credit access for both underserved and underbanked communities in the Philippines.

In a bid to nearly double its customer base, the bank plans to increase its clientele from 750,000 to 1.5 million. Central to this effort is its use of alternative credit scoring methods, which aim to simplify the lending process and make it more accessible, thereby fostering financial inclusion.

The bank reported a thirteen-fold increase in revenues by the end of 2023, totalling over P5 billion, with assets valued at over P22 billion by year-end, according to data from the central Bangko Sentral ng Pilipinas (BSP).

The regulatory environment is also poised for changes; the BSP has hinted at lifting the current cap on the number of digital banks, which currently stands at six. This cap has been in place to cultivate competition and manage the sector’s growth effectively.

UnionDigital Bank perceives the potential entrance of new competitors as both a challenge and an opportunity. The bank plans to harness its established foundations, alongside the broad network of its parent company, UnionBank, and the Aboitiz Group, to refine its services and integrate new technologies.

Featured image credit: Edited from Freepik