UnionBank inks deal with Western Union

CEBU, Philippines - Aboitiz Equity Ventures (AEV) banking arm, UnionBank is strengthening its presence in the global market, by partnering with financial services and communications company—Western Union.

AEV chief financial officer (CFO) Steve Paradies announced that the bank recently signed a Memorandum of Agreement (MOA) forging an alliance with the US-based company, together with VISA card.

This is to tap the growing number of Filipinos working abroad and frequency send money to their families back in the Philippines.

According to Paradies, instead of installing physical presence in different countries where high traffic of Filipinos are working or residential, the company opted to partner with the largest money transfer entity in the world, Western Union.

Money sent from any country, provided there is a Western Union outlet of accredited affiliate, money can be sent on time to UnionBank debit Visa Card holders.

Recently, AEV reported that UnionBank will continue to strengthen its customer franchise initiative.

AEV president and chief executive officer (CEO) Erramon Aboitiz said that the bank giving priority to customer satisfaction through “enhance retail focus, superior innovation and product customization, and stronger sales management approach.”

He added that UnionBank will also continue to focus on improving the performance of its earning assets portfolio, with loan asset acquisition in the retail, middle-market, and corporate sectors.

As a newly acquired subsidiary of UnionBank, thrift bank City Savings Bank will also continue with its focus to become the preferred Teachers’ Bank in the Philippines, particularly expanding its customer franchise in Luzon and other civil servant market segments.

UnionBank’s strength in technology, deposit generation and organizational capability is expected to optimize the potential of City Savings’ business model.

City Savings targets to open at least 10 new branches in Luzon, while UnionBank will open between five to 10 branches this year, Paradies said.

AEVs banking units (UnionBank, City Savings) turned in P3.9 billion or 16 percent of AEVs total income in 2012.

UnionBank ended the year 2012 with an earnings contribution of P3.3 million, up by 14 percent. Thais was on the back of higher net interest income and hefty trading gains booked during the period.

Net interest income grew by five percent to P7.3 billion, as lower funding costs more than offset the income drop from its assets.

Meanwhile, a 13 percent increase in non-interest income, the bulk of which was due to trading gains recognized for the period, bolstered the bank’s bottom line performance in 2012.

The bank maintained its ROE (return-on-equity) at 17 percent, while ROA (return-on-assets) for 2012 improved to 3.0 percent from 2.5 percent.

On the other hand, City Savings Bank contributed earnings of P520 million, closing the year two percent lower than 2011. The slight drop was due to the increase operating expenses due to the bank’s ongoing branch expansion program.

Although lower than 2011 the bank’s ROE and ROA remained healthy at 26 percent and 3.4 percent respectively.

City Savings’ gross loan book ended the year at P110 billion, a 13 percent expansion from 2011, Aboitiz reported. /JOB (FREEMAN)