UnionBank seeks capital exemptions ahead of UnionDigital integration

Union Bank of the Philippines has asked the Bangko Sentral ng Pilipinas (BSP) for relief from capital requirements linked to its planned absorption of UnionDigital Bank’s business. The lender said in a stock exchange disclosure that it wants to avoid further capital injections and regulatory capital deductions associated with the integration.

UnionBank argued that putting more capital into UnionDigital would no longer fulfil its prudential purpose given the planned integration. It also sought permission to stop deducting its equity investment in the digital bank when calculating the parent’s regulatory capital ratios. Neither request has received BSP approval.

Under a business transfer agreement, UnionBank plans to acquire specified UnionDigital assets and take on certain liabilities, targeting completion by April 2027. A separate transfer of selected assets from financial technology subsidiary UBX Philippines Corp. is expected to finish by the end of November 2026.

Both transfers require approval from the BSP and other relevant regulators. UnionBank said bringing the businesses into the parent would simplify its corporate structure and bring together their resources and capabilities.

UnionDigital has ₱9.8 billion in paid-up capital, and UnionBank holds almost all its outstanding shares. UBX has paid-up capital of ₱480 million; UnionBank owns 83.33 per cent and SBI Ventures Asset Pte. Ltd. owns 16.67 per cent.

UnionBank previously told UnionDigital customers that access to accounts, deposits, loans and other services would remain uninterrupted throughout the transition.