UnionBank And BSP Capital Relief to Absorb UnionDigital Bank

Union Bank of the Philippines (UnionBank) has asked the Bangko Sentral ng Pilipinas (BSP) for regulatory capital relief as it integrates its digital bank subsidiary, UnionDigital Bank, into the parent lender, Fintech News Philippines reported on Monday (Nov 2), citing the bank’s disclosure to the Philippine Stock Exchange.

The Aboitiz-led lender has filed two requests with the central bank, both of which still need BSP approval.

Two requests to the central bank

First, UnionBank is seeking an exemption from injecting more capital into UnionDigital. The bank said that, with the integration under way, such a capital infusion “will no longer serve its intended prudential objective,” according to Fintech News Philippines. The Philippine Star reported that the bank said an infusion would lead to unnecessary capital movements.

Second, UnionBank wants permission to stop deducting its equity investment in UnionDigital when calculating its regulatory capital ratios, which measure a bank’s capital against risk-weighted assets such as loans. Continuing the deduction “would not reflect the economic substance of the integration,” the bank said, as reported by the Philippine Star.

How the integration will work

UnionBank will acquire certain assets and assume certain liabilities of UnionDigital through a business transfer agreement, with completion targeted for April 2027.

In a separate transaction, fintech unit UBX Philippines Corp. will transfer selected assets to UnionBank. That deal is expected to close by the end of November 2026.

UnionDigital has paid-up capital of PHP9.8 billion and is virtually wholly owned by UnionBank. UBX has paid-up capital of PHP480 million, with UnionBank holding 83.33% and SBI Ventures Asset Pte. Ltd. holding the remaining 16.67%.

UnionBank said the consolidation brings assets, capabilities and resources under the parent bank and simplifies the group’s structure.

Customers of UnionDigital will be able to keep using their accounts, deposits, loans, app and other services without interruption, according to the reports.

The Philippine Star reported that UnionBank’s net income for January to September 2026 rose 53% to PHP9.9 billion, helped by higher interest earnings and fee income.

What’s next

Both transactions require clearance from the BSP, the Philippine Competition Commission, the Securities and Exchange Commission and the Department of Labor and Employment. The reports did not say whether the BSP has ruled on either of UnionBank’s capital requests.

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