MANILA, Philippines - Union Bank of the Philippines, the banking arm of the Aboitiz family, has secured the highest issuer credit rating from tPhilippine Rating Services Corp. (PhilRatings).
With a PRS Aaa rating, the highest on PhilRatings’ scales, Union Bank is deemed as having a very strong capacity to meet its financial commitments relative to that of other Philippine corporates.
An issuer rating is an opinion on the general and overall creditworthiness of the issuer, evaluating its ability to meet all its financial obligations within a time horizon of one year.
The rating issuance considered UnionBank’s ability to maintain its status as one of the country’s top-tier banks despite keen competition; strong corporate shareholders; very good quality of management; more stable and diversified revenue base outlook; and positive prospects for the country’s economy and the domestic banking industry.
“UnionBank’s strategy of giving more focus to its core business of lending, particularly consumer loans, is viewed as a significant factor in the bank’s objective to attain a balance between customer and treasury revenues,” PhilRatings said.
In 1992, UnionBank became the youngest publicly-listed universal bank in the country after only 10 years of operating as a commercial bank. Following its merger with International Corporate Bank (Interbank) and International Exchange Bank (iBank), the bank became one of the country’s largest universal banks based on asset size.
It continued to expand operations through acquisitions. In 2013, UnionBank took over City Savings Bank, a premier thrift bank specializing in granting teachers’ loans under the Department of Education’s Automatic Payroll Deduction System. The move was in line with the bank’s long-term strategy of building asset businesses based on consumers.
As of end-March this year, UnionBank was the country’s ninth largest bank in terms of total assets and loans while it ranked seventh and 10th based on total deposits and capital accounts, respectively.
UnionBank is majority-owned by Cebu-based conglomerate Aboitiz Equity Ventures Inc. (AEV), with an ownership of 44.5 percent as of June 30, 2014. The bank’s other significant shareholders are The Insular Life Assurance Co. Ltd. (16.21 percent) and Social Security System (13.99 percent). Insular Life and SSS hold two seats each in UnionBank’s board of directors.
Aside from banking, the Aboitiz family is engaged in power generation and distribution, food manufacturing and real estate.