UnionBank of the Philippines is pursuing significant debt market issuance initiatives to reinforce its digital banking operations.
The bank intends to raise up to USD $800 million from the offshore debt market, a move designed to bolster the financial strength of the digital expansion of UnionBank.
This planned issuance falls under UnionBank’s existing USD 2 billion, euro medium-term note programme (EMTN), which offers the flexibility to tailor debt issuances to specific funding requirements.
In parallel, UnionBank is expanding its domestic financial capabilities. The bank’s board of directors has approved an increase in its peso-denominated bond programme, doubling it to USD $1.7 billion. As an initial step, UnionBank plans to issue up to roughly USD $523 million under this expanded programme.
However, the bank has yet to disclose the precise details concerning the timing and terms of both the international and domestic debt issuances.
A primary motivation behind such a debt issuance initiative is UnionBank’s commitment to supporting the growth of UnionDigital Bank. Consequently, UnionBank will inject an additional USD $20.9 million into the expansion of its digital subsidiary.
The capital injection will provide operational support and facilitate UnionDigital’s pursuit of sustainable growth. Launched in 2022, UnionDigital plays a vital role in UnionBank’s strategy for digital loan expansion, providing accessible credit and loan application services through its mobile application.
UnionBank’s financial performance in 2024 demonstrates its robust market position. The bank also reported a 31% increase in net income. This substantial growth can be partly attributed to the successful integration of Citi’s Philippine consumer business.
This acquisition has significantly enhanced UnionBank’s consumer loan portfolio, which now represents 61% of its total loan portfolio, considerably exceeding the industry average. The bank’s top line also showed strong growth.
Featured image credit: Edited from Freepik
