Aboitiz-led Union Bank of the Philippines (UnionBank) is allotting P2 billion for its 2019 capital expenditures (capex) budget to finance its ongoing digital and branch transformation initiatives.
In the long term, we expect our economic growth to continue at a higher rate, providing our businesses a platform to continue advancing business and communities
This is lower than their P3 billion capex budget in 2018.
The listed lender is targeting to convert 40 of its branches into fully digital bank branches this year, called the ARK.
It also recently concluded the pilot testing for an android robot which will soon be installed in the ARK branches, as part of the third phase of their digital transformation.
“Right now we have 17 and we have one in each major city — Cebu, Davao and most of the key areas in Metro Manila,” UnionBank president and chief executive officer Edwin Bautista told reporters at a news conference on Monday, 22 April in Makati.
“Our digital branch, which has been awarded best digital bank institution in Asia, has been rolled out across the country and by the end of this year, 20 percent of our branch network would now be on the ARK configuration,” he added.
In particular, the bank is gearing up for the larger use of blockchain through various efforts such as funding the training of developers in order to fill the lack in the industry.
“There’s going to be a lot of applications and we certainly want to be at the forefront of these innovations should they become mainstream in the Philippines,” Baustista said.
“As you know, we’re into blockchain, but we had a problem last year — there were not enough developers. So we promised the industry we’ll train 100 blockchain developers.
After six months, I’m happy to inform you we’ve graduated 100 blockchain developers all at the expense of UnionBank.”
The P2-billion capex for UnionBank is a slice of the P81-billion budget Aboitiz Equity Ventures (AEV) has allotted for 2019, a surge of 65 percent from the P50-billion figure utilized by the company in 2018.
The bulk of the budget will go to AEV’s units AboitizPower (P51 billion) and Aboitiz InfraCapital (P16 billion) to “sustain growth momentum in the long term.”
“In 2019, AEV expects the Philippines to record a gross domestic product growth rate of 6.8 percent due to election spending and public and private construction, supported by strong and continuing public expenditures on various infrastructure development projects,” AEV president and chief executive officer Erramon Aboitiz said.
“This is why we are quite confident in our capex program for the year. In the long term, we expect our economic growth to continue at a higher rate, providing our businesses a platform to continue advancing business and communities.”
UnionBank’s shares were sold for P60.85 apiece as of 3:20 p.m., Monday, down 1.06 percent.