Philippines: UnionBank Seeks BSP Capital Relief to Absorb UnionDigital Bank by April 2027
UnionBank of the Philippines wants to fold its digital bank, UnionDigital Bank, back into the parent by April 2027, and it has asked the central bank to ease two capital rules while it does so. The move is one of the clearest signs yet that a large Philippine bank sees more value in running digital banking under one roof than in a separate licensed subsidiary.
Key facts
- UnionBank has asked the Bangko Sentral ng Pilipinas (BSP), the Philippine central bank, to exempt it from putting more capital into UnionDigital Bank ahead of the integration.
- It also wants the BSP to stop deducting its equity investment in UnionDigital when its regulatory capital ratios are calculated.
- UnionDigital has paid-up capital of PHP 9.8 billion, and UnionBank owns virtually all of its shares.
- Fintech arm UBX, with PHP 480 million in paid-up capital, will move selected assets to UnionBank by the end of November 2026. UnionBank owns 83.33% of UBX and SBI Ventures Asset holds 16.67%.
- Both requests still need BSP approval, and the deals also need clearance from other Philippine authorities.
What UnionBank is asking for
The integration will be done through a business transfer agreement: UnionBank will buy certain assets of UnionDigital and take on certain liabilities, rather than merging the two companies outright. The target completion date is April 2027.
Under normal rules, a bank that owns another bank must deduct that investment from its own capital when it measures how strong its balance sheet is. Capital ratios compare a bank’s capital with its risk-weighted assets, such as loans, so a big deduction makes the parent look thinner. UnionBank argues that, with UnionDigital about to be absorbed, the deduction would not reflect what is really happening, and that topping up UnionDigital’s capital would no longer serve its prudential purpose. In its words, it would only cause “unnecessary capital movements.”
Fintech News Philippines reports that the transactions also need sign-off from the Philippine Competition Commission, the Securities and Exchange Commission and the Department of Labor and Employment. UnionBank says UnionDigital customers can keep using their accounts, deposits, loans and app without interruption during the transition.
Why it matters
UnionDigital was set up as a stand-alone digital bank, part of the BSP’s push to bring more Filipinos into formal banking through app-based lenders and savings accounts. Pulling it back into the parent suggests that, for an established bank, a separate digital licence can mean duplicated costs, separate capital buffers and separate technology, while the same customers could be served through the main bank’s app.
UnionBank is doing this from a position of strength. It reported a 53% rise in net income to PHP 9.9 billion for the first nine months of 2026, on net revenues of PHP 65.5 billion, and says its retail customer base is above 19.5 million. Chief executive Ana Delgado has framed the plan as a way to serve more customers and make better use of what the subsidiaries built.
For the wider region, the case is worth watching. Several Asian markets, including the Philippines, Malaysia and Singapore, have licensed digital banks in recent years, and some were launched by or with existing banking groups. How the BSP treats UnionBank’s requests could shape how other bank-owned digital lenders think about their structure once the start-up phase is over.
What to watch
- Whether the BSP grants the capital exemption and the change in how the UnionDigital investment is treated.
- Completion of the UBX asset transfer, expected by the end of November 2026.
- How UnionDigital’s app, accounts and loans are moved into UnionBank before the April 2027 target.
Related on FinDeskAsia: Philippines: BSP says Revolut digital bank licence talks are “very active” · How Malaysia’s payment system works
Sources: Philstar (Nov 2026) · Fintech News Philippines (Nov 2026) · Marketech APAC (Oct 2026) · Kaskasan Buddies (Oct 2026)
