Union Bank of the Philippines, the banking arm of the Aboitiz Group, has approved a capital infusion of up to P1.5 billion into its thrift bank subsidiary, City Savings Bank Inc. (CitySavings), to support the latter’s continued expansion and operational needs.
The additional capital, subject to regulatory approval, is aimed at bolstering CitySavings’ capacity to grow its loan portfolio and meet funding requirements amid a challenging interest rate environment.
CitySavings is one of the Philippines’ largest thrift banks, with a focus on inclusive lending. It offers a broad suite of mass-market financial services, including salary loans for public and private school teachers, pension loans for GSIS and SSS retirees, and financing for motorcycle buyers, government workers, and uniformed personnel.
As of end-2024, CitySavings reported a total loan portfolio of P109 billion, up 8 percent year-on-year, driven largely by its dominance in the Department of Education (DepEd) salary loan segment. However, net income dropped to P1.3 billion from P2.4 billion in 2023, weighed down by high interest rates and sustained loan loss provisioning.
The thrift bank ended 2024 with a Common Equity Tier 1 Capital of P15.18 billion, and total stockholders’ equity of P21.33 billion as of June.
To enhance funding resilience, CitySavings aims to optimize its funding mix by increasing retail deposits—particularly current account/savings account—and maintaining compliance with liquidity requirements, according to its latest annual report.
