Healthy growth seen to spur use of banks

By Riza Lozada 

Union Bank of the Philippines (UnionBank) sees the consumer market as a profit driver this year as a result of the steady growth in the economy. 

“For the whole banking industry, the new opportunity is the consumer (banking segment) because part of the offshoot that the fact the economy growing 6 percent to 7 percent, we are seeing the growth of the middle class and given that 120 to 130 million population, we are very attractive to not only to Philippine businesses and international businesses and we see UnionBank a bank that needs to adopt the future,” UnionBank Executive Vice President Genaro Lapez said.

The bank remains bullish that its aggressive drive towards automated and digital services will lead to financial inclusion of the unbanked sector.

Lapez cited a big disconnect in terms of the penetration rate of cellular phones and bank accounts of Filipinos.

He said based on telecommunication companies’ data last year, mobile phone penetration rate has reached 60 percent compared to Filipinos who own a bank account at only 20 percent of the population.

UnionBank will be aggressive in transforming the banking industry into a robust banked sector as it considers smart mobile devices “enablers” for financial inclusion, Lapez added.

“Since 60 percent of population owns smart mobile devices, they are considered ‘bankable’,” Lapez added.

“The target is really to get as many as those with smart mobile devices and we are not just limited to deposit account but also transaction account with our remittance strategy,” he said.

He added that it is not important for the bank to have the most remittance partners, but the services they offer should help overseas Filipino workers (OFWs) and their recipients on the use of funds.

UnionBank sees the growing remittances from OFWs to continue and this will be complemented with the bank’s strategy to promote financial inclusion through digital mobile banking.

“We are seeing another ingredient, a high percentage of smart mobile devices so we have to be flexible on this. The reason of digital transformation is to help ensure that UnionBank to be flexible with the growing smart mobile device and there is no decline in money remittance. We will help achieve financial inclusion,” Lapez said.

UnionBank reported earnings to P8.14 billion, up 121.8 percent for the first nine months of last year, attributed to robust recurring revenues and profits from sale of securities. Improved performances of the loan portfolio, deposit profile and fee business contributed to higher recurring income, Lapez said.

The bank’s net interest income grew by 24.6 percent to P10.9 billion. As of September 30, 2016, net loans and receivables increased by 23.2 percent to P221.2 billion, from P179.6 billion in 2015.

UnionBank expects growth will be driven by core revenues as the bank continues to expand its loan portfolio, Lapez said.