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UnionBank boosts sustainable financing strategy

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FOLLOWING a Central Bank mandate, Aboitiz-led Union Bank of the Philippines announced on Tuesday that it has established its Sustainable Finance Framework (SFF).

An independent global agency has also reviewed the bank’s SFF and issued a second party opinion, the bank said. The agency said the bank’s SFF was parallel with the relevant global sustainability principles and standards, according to UnionBank.

Citigroup acted as the structuring advisor for the bank’s framework.

“The SFF reinforces the bank’s commitment to sustainable development, focusing on people, planet and purpose, while managing risks and opportunities of a changing world,” the Aboitiz-led bank said in a recent disclosure.

UnionBank shares ended flat at P74.85 apiece amid the 0.78-percent uptick for the main index on Tuesday.

It is one of the key requirements set by the Bangko Sentral ng Pilipinas in Circular 1085. The regulation aims to incorporate sustainability principles, including those covering environmental and social risk areas, to the banks’ corporate governance framework, risk management systems and strategic objectives.

The banks were given three years from effectivity of the circular to fully comply with all the included provisions.

The local financial institutions were also tasked with submitting board-approved transition plan regarding the adoption of the SFF, which UnionBank did last November 30.

According to its SFF, UnionBank is putting an effort in minimizing environmental footprint. Its headquarters, for example, has been fully powered by renewable energy since 2017.

All the bank’s branches are compliant with the Leadership in Energy and Environmental Design (Leed) protocols. In addition, 22 of the branches are LEED-certified already.

“UnionBank is focused on promoting financial literacy and inclusion while bringing accessibility and banking convenience to the underserved and unbanked,” the framework noted.

The bank also included the welfare of its employees in the framework, saying that it “cultivates an agile and non-discriminatory workspace for a future-ready, interdisciplinary workforce.”

In a separate statement on Tuesday, UnionBank’s thrift arm City Savings Bank Inc. reported that it has distributed government subsidy under the social amelioration program to nearly 5,000 beneficiaries. They are located in Metro Manila and Regions 3, 4A, 6 and 7.

“Amidst the health crisis, CitySavings is here to help and fully support this government-led initiative,” CitySavings President and CEO Lorenzo T. Ocampo said. “We hope to make the lives of our fellow Filipinos better by providing accessible banking services in their locality.”

On Monday, UnionBank reported that its net earnings dropped by 17 percent to P11.6 billion last year from P14 billion in 2019 due to higher credit loss reserves.

Loan loss buffer last year reached P8.7 billion, which is more than four times the P1.9 billion it set aside for 2019.

Its capital equity tier 1 ratio and capital adequacy ratio are currently at 15 percent and 17 percent, respectively, which are both above minimum regulatory requirements.

Read full article on BusinessMirror

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