UnionBank, iBank merger opens loan doors for SMEs

Aboitiz-led Union Bank of the Philippines widens its doors in opening loan facilities to the Small and Medium Enterprises (SMEs) starting this year, after it completed its integration works with newly acquired International Exchange Bank (iBank).

In an interview with Aboitiz Equity Ventures (AEV) chief financial officer (CFO) Stephen G. Paradies, he said that Union Bank had been inactive in providing lending services to SMEs after the 1997 regional crisis, now it has decided to reopen its loan products to the thick SME market.

“We were not present in this market [SMEs] for years now. We used to lend to SMEs before, but after the [1997] crisis we retreated,” he said.

With the integration of iBank, Union Bank has now 180 branches nationwide. Paradies said the bank still has to fully integrate the branches’ operations across the country, including the changes of the bank’s logo.

“We will be launching new logo in the next few months. We are increasing our presence to the SME market, also make aggressive move to lend to large infrastructure projects like toll ways, and others,” he said.

Also, he said active activities in other forms of lending products, like credit card, auto loans, housing, will be intensified in the next few months, to increase the bank’s penetration in the consumer banking loans.

Union Bank is boasting of its one-of-the-best banking platforms in the country. Consequently, it has gotten advantage of the government accounts, he added.

Businesses, which need more capitalization requirements will be able to count on Union Bank, he said, as SME market is now one of the priorities for corporate loan offering of the bank.

He said iBank had been active in lending to SMEs. Now, that Unionbank has acquired the bank, Paradies said it has to pick-up its expertise in lending to SMEs.

Exporters, importers, traders, real estate developers among others are one of the markets that are being looked at by the bank in terms of lending, Paradies said.

In 2006, Union Bank produced a net profit of P2.5 billion notwithstanding the impact of the acquisition and merger on operating costs.

The acquisition and merger puts together the complementary strengths of two banks: the financial strength and technological sophistication of Union Bank, and the culture of service excellence of iBank.