UnionBank bets on retail boost
UNION BANK of the Philippines, Inc. (UnionBank) expects its retail business to boost its growth this year as an industry-wide slump in trading gains is seen continuing on the back of persisting market volatilities.
The Aboitiz- led bank’s total loan portfolio is already bigger “in general” compared to its income from securities, UnionBank Senior Executive Vice-President Edwin R. Bautista said.
“There’s a big growth in our loan book. It’s something that in the past we’ve said that we’ll do but the growth has always been just modest... but since last year, most of our growth is coming from retail,” Mr. Bautista told reporters in the sidelines of an Aboitiz party last Thursday.
Currently, consumer lending — auto loan, mortgage, salary loans — makes up “more than half” of UnionBank’s P150-billion lending portfolio, while the rest are commercial loans, he added.
“I think most of the banks know that the trading income would not be as much this year. We’re all trying to recover it through net interest income, fees, so growth, it will have to come from expansion of loan book because your source of income would be loans, fees, trading income. Since the opportunity to gain from trading income is not there, you have to make up through the other lines,” Mr. Bautista said.
The bank official, who is set to take over the post of current UnionBank President and Chief Operating Officer Victor B. Valdepeñas by yearend, noted that there is a push to foray into retail banking since the “margin is very good.”
Aboitiz Equity Ventures, Inc. ( AEV) President and Chief Executive Officer (CEO) Erramon I. Aboitiz said in his speech during the same event that for UnionBank, AEV — the listed holding firm of the Aboitiz family’s businesses — “remains focused on its 2020 strategic objectives: double market share to 9%, 15% CAGR ( compounded annual growth rate) volumes, balance revenues and becoming a great retail bank.”
Last May, Mr. Valdepeñas told reporters that the Aboitiz- led bank targets up to 30% growth in its loan portfolio in 2015 com-