UCPB unit gets quasi-banking license

MANILA, Philippines –  The Bangko Sentral ng Pilipinas (BSP) has given a unit of United Coconut Planters Bank (UCPB) the green light to operate as a quasi-bank, giving it alternative financing options to boost its operations through more funds for relending or purchasing of receivables.

The BSP, in a circular, approved the request of UCPB Leasing and Finance Corp. (UFLC) to engage in quasi-banking functions.

UFLC, a wholly-owned subsidiary of UCPB, is now allowed by the BSP to borrow funds through issuance, endorsement or assignment with recourse or acceptance of deposit substitutes as defined in Section 95 of Republic Act 7653, also known as the New Central Bank Act, for purposes of relending or purchasing of receivable and other obligations to more than 19 non-institutional persons.

With a quasi-banking license from the BSP, ULFC could now further widen its fund sources to support a more aggressive expansion.

RA 8791 or the General Banking Law of 2000, through Sec. 6, allows the BSP to grant companies the authority to engage in banking and quasi-banking functions. The law states that no person or entity shall engage in banking operations or quasi-banking functions without authority from the central bank. 

ULFC offers a full range of financial lease including direct lease, fleet lease, lease syndication, sale and leaseback and vendor lease as well as factoring, receivables financing and commercial loans mainly to the manufacturing, services and utilities sectors.

UFLC and other UCPB subsidiaries, including UCPB Savings Bank and UCPB Securities, posted a 17 percent rise in net income to P154 million in the first half of the year.

This helped UCPB book a 238 percent rise in earnings to P1.14 billion in the first half of the year, boosting the bank’s chances of delivering its promised income of P2 billion this year.

UCPB said profits from January to June were boosted by the “robust growth in interest income from loans and investments, hefty trading gains, lower cost of funds and the strong performance of the bank’s subsidiaries.”

In the first half, UCPB’s non-interest income grew 38 percent to P988 million as the bank continued to capitalize on trading gains as global markets recover, and to focus on enhancing its fee-based income.

On the other hand, the bank’s consumer loans contributed significantly in loan growth of 18 percent or P49.87 billion during the period with consumer loans increasing by 57 percent. 

UCPB upgraded its core banking systems to speed up turnaround time; moved 14 of its branches to new sites to tap bigger markets and renovated 39 other branches to improve visibility and customer convenience; and improved its ATM network’s reliability and reach by replacing old machines with new models, and adding 16 more ATMs to widen coverage to 237 locations.

As of end-June, the bank’s total deposits were 11 percent higher at P133.98 billion owing to its low-cost current and savings accounts.