UnionBank credits strong performance to digital shift

Published March 24, 2021, 5:30 AM

by James A. Loyola

Union Bank of the Philippines reported that its strong performance last year despite the global effects of COVID-19 shows that it is now reaping the fruits of its digital transformation almost five years ago. 

The Bank was able to achieve a net income of P11.6 billion, despite credit reserves growing by nearly five-fold year-on-year or close to P7.0 billion more than 2019. 

Earnings performance translated to a return on equity of 11.9 percent, way above the industry average of 6.6 percent in 2020.

The Bank said it recorded the highest growth rate in its CASA deposits of 24%, in the last twenty years.

UnionBank president and CEO, Edwin R. Bautista

“This was brought about by retail customers trusting the availability and security of the Bank’s digital channels, together with corporate accounts moving collections to the Bank, because of visibility over transactions and best-in-class, self-service cash management implementation,” it noted.

From the original target of attracting a million new customers, UnionBank was able to attract twenty-four million new accounts in 2020 with a large portion coming from digital account opening.

It is the only Top-10 universal bank in the country that was able to introduce, during the crisis period, an account which can be fully-opened, without going to any physical branch, which resulted in large customer adoption.

The growth in customers and digital transactions resulted in strong operating income for the year. Revenues were at an all-time high of P42.1 billion driven by the expansion of net interest income by 29 percent to P28.7 billion. 

Growth in operating expenses was kept at low single-digits despite robust business growth due to sustained efficiencies from digitization.  Due to these efficiencies, 2020 OpEx grew by 4 percent despite the effects of the pandemic.

UBX, the Bank’s technology and innovation firm, signed up more than 140,000 MSMEs across its platforms namely i2i, BUX, Sentro, and SeekCap.

“I am pleased with the Bank’s 2020 performance despite a challenging year. This was a product of all UnionBankers who continued to push boundaries and whose heroic efforts during this crisis has propelled us to greater heights,” said UnionBank President and CEO Edwin R. Bautista. 

He added that, “As we line up new features in our digital channels and Tech Up especially more of our underbanked and unbanked countrymen, we aim to move full throttle in 2021 with the end in view of achieving a bank of enduring greatness.”