Aboitiz group’s universal lender Union Bank of the Philippines (UnionBank) plans multi-tranche bond issuances after successfully upsizing its bond program from P39 billion to P100 billion.

UnionBank said it completed expanding the bond program on 9 May after initially setting it at P39 billion on 26 April 2019 and later increasing it to P50 billion on 25 October 2023.

UnionBank’s board decided to further upsize the bond program on 28 February 2025.

“The bank may occasionally offer, issue, and sell the remaining balance of unissued and non-outstanding unsecured and unsubordinated PHP bonds,” UnionBank indicated.

“Details regarding each issuance or each tranche shall be disclosed at the appropriate time,” the bank added.

One-off costs hurt profit

UnionBank’s net income was P1.4 billion in the first quarter of this year, down from P2 billion in the same period in 2024, due to taxes and one-time expenses.

Revenues grew 8.4 percent to P19.4 billion due to substantial consumer loans, which account for 62 percent of the bank’s total portfolio. UnionBank shared that its number of clients has increased to 17.6 million.

“If we normalize for the impact of one-offs, our net income would be comparable to prior quarters,” UnionBank chief financial officer Manuel Lozano said.

“Moving forward, we expect performance to return to this trajectory and we remain confident that we will exceed our 2024 performance,” he added.

The bond program underlines the bank’s liquidity and capital base, enabling it to pursue growth opportunities in a competitive market. 

It also reduces reliance on short-term funding and improving financial stability.

Funds from the issuances will support digital initiatives, such as enhancing its mobile app, expanding financial technology partnerships, and improving cybersecurity. 

These investments are critical to maintaining its edge over traditional and digital-only competitors like Maya Bank.

The successful upsizing of the bond program signals strong investor confidence in UnionBank’s creditworthiness and growth prospects, despite a profit dip in the first quarter. 

The bank’s ability to attract investors for future tranches will depend on market conditions and its ability to demonstrate stable earnings.

The Bangko Sentral ng Pilipinas  encourages banks to maintain strong capital buffers under Basel III standards. UnionBank’s bond program supports compliance with capital adequacy requirements while funding growth without diluting equity.