UNIONDIGITAL Bank, Inc., the digital bank unit of Union Bank of the Philippines, Inc., may disburse less loans this year to keep its nonperforming loan (NPL) ratio low.

“The disbursements are going to be significantly lower this year versus last year because last year, the loan book grew, but the NPLs also grew. So, we learned from that. We are going to be more disciplined,” UnionDigital Bank President and Chief Executive Officer Danilo “Bong” J. Mojica II told reporters on Wednesday.

“The criteria that we use to lend are significantly more disciplined. We’re using more alternative data because at the bottom of the pyramid, not all of them have a credit card or loan data, so we have to use alternative data like telephone data,” he said.

At end-2024, UnionDigital Bank’s net NPL ratio was at 12.12%, latest Bangko Sentral ng Pilipinas (BSP) data showed. Its net loans were at P5.92 billion.

“Sometimes when you rush your growth, you become careless, and I think some of the challenges that we had were from growing too fast. The board and the management, we have actually decided to be more purposive. It is better to be small and profitable than to be big with major NPLs,” Mr. Mojica added.

UnionDigital Bank currently has just over one million users, with 453,000 of these customers availing of loans, he said.

On Wednesday, the digital bank announced a rebrand as they target to make their services more accessible to first-time users, especially those from underserved or unbanked sectors like sari-sari store owners, ride-sharing drivers, daily wage earners, and informal workers.

It launched a campaign that includes a financial literacy program, which will be done through partnerships with communities.

UnionDigital Bank will also launch new products including a basic savings account with no minimum balance and maintenance fees, a time deposit product with a minimum amount of P1,000, payroll loans, cash loans, and a Visa-powered virtual debit card.

“Additional features in development include early wage access, which will enable workers to tap into their salary ahead of payday, and microinsurance offerings to help users stay protected from unexpected life events,” it said.

UnionDigital Bank is one of the six BSP-licensed digital banks in the country. It secured its license in July 2021 and began operations in July 2022.

Its total assets stood at P19.45 billion as of end-2024, latest BSP data showed.

In 2023, the digital bank booked a net profit of P155.31 million, a turnaround from the P447.14-million net loss posted in 2022, according to its annual report for that year. — Aaron Michael C. Sy