UnionDigital Bank Wins Profitability Race in PH Digital Banking

UnionDigital Bank, the digital bank subsidiary of Union Bank of the Philippines, is one of the fastest digital banks in the world to achieve profitability. It attained a triple-digit percentage growth in its net income during the first half of 2023 compared to the second half of 2022. The Aboitiz Group-led digital bank, which recently marked its first-year milestone in July, attributed this to the robust loan portfolio growth via the UnionBank ecosystem.

“We are grateful to be one of the six Philippine digital banks that are committed to making a difference in the lives of all Filipinos by empowering them to pursue their aspirations. The commitment and hard work of our Ka-UBEHs in UnionDigital and UnionBank have pushed us to become one of the fastest digital banks in the world to achieve profitability,” said Henry Aguda, President and CEO, UnionDigital Bank. “This milestone is not just UnionDigital’s win, but a collective victory that should be celebrated by the entire Digital Banking Association of the Philippines (DBAP) family as it affirms the world class innovation of the Philippine digital banking industry. Philippine banking is ready for the global stage.”

The Bangko Sentral ng Pilipinas (BSP) has endorsed the establishment of the DBAP, an initiative aimed at addressing the immediate priorities necessary for the prosperity and success of digital banks in the Philippines.

”As we emerge as the fastest to profit digital bank in the Philippines, the endorsement of the DBAP by the BSP is testament to the strong support of our regulator to the future of this industry. This initiative not only reflects our commitment to innovation but also reaffirms the BSP’s dedication to the growth and prosperity of PH digital banks. Together, we’re shaping a dynamic future for the industry,” added Aguda.

The digital bank’s deposits also saw a 113% surge, amounting to PHP 20 billion, which is 32% of the market share among digital banks. Its loan portfolio has grown to PHP 13 billion, notching a 126% upswing. The company shared that it had captured a substantial 75% of the market share for loans within the digital banking industry as of May 2023.

UnionDigital’s stellar performance, backed by its strong fintech capability, support of the BSP, and deep linkages with the ecosystem of the Aboitiz Group, was recognized at The Asian Banker Excellence in Retail Financial Services and Technology Innovation Philippines Awards 2023, where the company won the “Best Digital-Only Bank” award.

TABInsights, the research arm of TAB Global and a sister company of The Asian Banker, also ranked UnionDigital Bank as number 58 in the Global Top 100 Digital-Only Bank Ranking 2023, which features only two digital banks from the Philippines. The ranking evaluates digital banks based on customer service, market coverage, profitability, asset and deposit growth, and funding.

”Receiving this honor from The Asian Banker is a privilege we hold in high regard. This award is not solely ours to claim; we extend this to our fellow digital bank counterparts, our parent, UnionBank, and the BSP, all united by a common objective – uplifting the lives of Filipinos through financial inclusion,” shared Aguda. “This recognition reflects our joint dedication and commitment to reshape the financial landscape for the better. It underscores the importance of working together and pursuing common goals to drive our nation’s progress and prosperity.”

UnionDigital Bank has recently signed partnerships with different key players in diverse industries to launch its embedded banking services.

“We have built a strong pipeline of partnerships and are also scaling up our retail app to help us diversify our deposit base,” said Mike Singh, Chief Commercial and Revenue Officer, UnionDigital Bank. “Our focus remains on giving access to essential financial services to the underserved such as micro, small, and medium enterprises (MSMEs), and overseas Filipino workers (OFWs) through upcoming products in our app.”

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