UnionDigital Bank expects to breakeven next year on better asset quality

UNIONDIGITAL Bank, Inc. (UD) aims to breakeven by the second half of 2026 as it plans to expand its lending while managing its asset quality.

“I can tell you with confidence but not certainty that we will breakeven next year… We have the right things in place for all of that to happen. Three things happened: NPL (nonperforming loans) has been corrected, the positioning of the bank is more akin to what the bank really means to be, and we are poised for growth,” UnionDigital President and Chief Executive Officer (CEO) Danilo “Bong” J. Mojica II told reporters on the sidelines of an event on Friday.

UD expects to end this year with “hundreds of millions” less in losses from 2024, he said.

The digital bank booked a net loss of P3.13 billion in 2024, a reversal of the P155.31-million net income recorded in 2023, its annual report showed.

It also expects to end the year with an NPL ratio below 6% as a result of the bank’s move to be more “disciplined” in lending and boost its loan loss provisioning after Mr. Mojica took over the CEO post in August, among other changes in leadership positions, that marked its shift to a “low and grow” strategy that prioritizes shorter-tenor payroll loans and gradually scaling high-performing accounts.

The latest data from the Bangko Sentral ng Pilipinas’ (BSP) website showed that UnionDigital’s gross NPL ratio was at 55.64% at end-June, with its gross NPL coverage ratio at 103.7%.

The bank also expects to have close to P7 billion in loans by yearend. Its gross loans stood at P3.58 billion as of June 2025, down from P5.11 billion in 2024.

With these in order, UD will be able to ramp up its lending activities again, Mr. Mojica said.

He added that the digital bank will be launching new products next year through partnerships within the Aboitiz Group ecosystem. — AMCS