SEC approves incorporation of UnionBank's digital banking unit

MANILA, Philippines — The Securities and Exchange Commission has approved the incorporation of a digital bank that is backed by UnionBank of the Philippines.

In a disclosure to the Philippine Stock Exchange on Monday, the Aboitiz-led lender said it received the corporate regulator’s clearance for the incorporation of its wholly-owned subsidiary, Union Digital Bank (UnionDigital), on November 26. 

Back in July, UnionBank joined the emerging industry after securing a digital banking license from the Bangko Sentral ng Pilipinas in a bid to expand its consumer reach as more customers turned to online financial services amid the pandemic.

The BSP approved six applications for a digital bank license, down from the planned seven after applicants failed to submit complete documents. The central bank has imposed a three-year moratorium on new applications to assess the burgeoning industry’s impact on the local financial system.

Apart from UnionDigital, the BSP awarded digital banking licenses to Overseas Filipino Bank, Tonik Digital Bank, UNObank, GOtyme, and Maya Bank. 

UnionBank’s operations proved profitable in the first three quarters of the year as net profits climbed 26% year-on-year to P10.71 billion, thanks to lower loan loss provisions. 

As of 11:56 a.m., shares in UnionBank were trading down 0.47%, tracking a bearish mood in the main index.