UNION Bank of the Philippines, the country’s ninth-largest lender in terms of assets and controlled by the Aboitiz Group, is aiming at an ambitious 80-percent share of digital adoption rate from the current 44 percent in a couple of years that will help the bank improve its bottom line.
“… Because if they’re [customers] digital, one, they won’t withdraw all their money from their ATM, they’ll keep it there, and they’ll use it to buy things and when they buy in a POS [point-of-sale] terminal, the bank makes one and a half percent or one percent from the transaction in virtual discounts,” bank president and chief executive Edwin Bautista said in an event Thursday evening in Makati City.
“… We make money and at the same time, we don’t crowd the tellers, they don’t go to the branch, our cash handling goes down, our cost goes down. So revenues go up, the cost goes down,” Bautista said.
Bautista, however, declined to give the timetable for the 80-percent adoption rate. ”I really don’t know, that’s a number that is hard to tell because I think even DBS, they only have I think below 60 percent in terms of digital adoption,” he said.
He also said none of the old banks that transitioned to digital have reached anywhere near 70 percent.
“… When we reach the magic number of 80 [percent], we can now consider ourselves a digital bank. That is more or less the yardstick… that you are more digital than anything. Well, when you cross 50 percent then you are already 50-50,” he said.
Union Bank posted an 8-percent increase in net income in the first six months of 2018 to P4.7 billion from P4.4 billion a year ago on the sustained strength of its customer businesses.
Net revenues rose 9.1 percent to P12.7 billion from P11.7 billion in the same period last year, translating into an annualized return on equity and return on average assets of 12.8 percent and 1.6 percent, respectively.
Total loans increased 18 percent year-on-year to P313.0 billion, with retail accounting for 33 percent of the total portfolio.