INSIDE THE REPORT About UnionBank 04 Purpose Statement and DNA Business Profile ABOUT THE COVER Business Presence and Economic Contribution 10 About the Report Sustainability Leadership 16 Joint Message of the Chairman and President & CEO The cover artwork portrays how sustainability in UnionBank is integrated with Sustainability Scorecard 2020 the digital transformation Policy and Framework strategy. The financial 22 Key Indicators technological breakthroughs and digital capability programs we have today People and Digital Transformation prove that we can make Approach and Metrics co-creation of innovations 28 Scorecard happen, driven by our mission Innovating for Social Good to “tech up” our customers, business partners, and other stakeholders. Planet and Sustainable Finance Approach and Metrics UnionBank believes that by 48 Scorecard empowering and enabling Unlocking Tomorrow’s ESG Opportunities its workforce and our fellow Filipinos with digital skills and capabilities, we can effectively Purpose and Inclusive Prosperity design products, services, and Approach programs that can help care 58 Scorecard for and sustain our planet. Designing the Digital Ecosystem for Entrepreneurs By championing innovation, we create a groundswell of communities that will have the Special Story: capability to hack solutions 66 Future-Proofing People in the Time of Pandemic that can address the wicked challenges of our world today. 76 GRI Index 84 Annexes 4 | UnionBank 2020 Sustainability Report VISION EMPLOYER BRAND ABOUT To become one of the top three universal banks Own the future. Co-create innovations. in the Philippines by building a bank of enduring greatness. UNIONBANK CREDO PURPOSE We are a dynamic Bank committed to PURPOSE STATEMENT AND BANK DNA bringing the future of banking to the To co-create innovations for a better world. present by being forward thinking, innovative, open, and agile. VALUES We seek to provide our customers with the best solutions and experiences. We As we co-create the future, we remain rooted to are committed to driving our customers our three core values: to success by powering our systems with advanced technology and INTEGRITY platforms. We are accelerating their I do the right thing at all times. I am trustworthy, growth by connecting them to a whole transparent, and authentic. I treat everyone with new world of opportunities. respect. I am fair, honest, and accountable for all my actions. We are more than a bank. We seek to transform the lives of Filipinos and make MAGIS their dreams a reality. Our goal is to co- I am obsessed with the customer. I continuously create innovations for a better world. innovate. I learn fast to build capabilities. I achieve great results with an agile mindset. FOCUS UBUNTU I collaborate. I seek to understand through UnionBank is dedicated to becoming one courageous conversations. I give feedback, of the top three universal banks in the real-time, and on-demand. I communicate Philippines by the year 2020. In fulfilling clearly and openly. this mission, we commit ourselves to five key imperatives to help drive us forward: CORPORATE BRAND IDEA • Financial Value • Operational Excellence Powering the future of banking. • Superior Innovation • Customer Franchise • UnionBank Brand/Experience DISTINGUISHING BELIEFS Forward thinking. Innovative. Open. Agile. TECH-UP | 5 TECH-UP | 7 BUSINESS PROFILE MASS MARKET AND PARTNERSHIPS FINANCIAL INCLUSION We pursue strategic partnerships with Union Bank of the Philippines organizations and institutions that align (UnionBank) is a publicly listed UnionBank leverages on its mass market with our advocacy on innovation and universal bank and a pioneer CONSUMER BANKING reach and technology to promote financial digital transformation for social good, of digital banking and financial inclusion. The bank has two major vehicles which is geared towards bringing to technology in the Philippines. This segment principally handles to achieve this. life the bank’s Purpose of “co-creating UnionBank’s clientele encompasses individual customers’ deposits and innovations for a better world.” retail, middle-market, and corporate provides consumer type loans, such as customers, as well as major automobiles and mortgage financing, government institutions. credit card facilities and funds transfer Lombard Odier partnership facilities. In 2016, UnionBank entered into a The bank, originally known as “Union cooperation agreement with Lombard Savings and Mortgage Bank”, was Odier, a Swiss global wealth and incorporated on August 16, 1968. City Savings Bank asset manager, to expand its wealth By 1982, it was given the license to CitySavings is our thrift bank subsidiary and asset management businesses. operate as a commercial bank and and the mass market arm of the banking UnionBank and Lombard Odier work a decade after, its common shares CORPORATE AND group. With its basic philosophy of to offer estate planning solutions, and were listed in the Philippine Stock COMMERCIAL BANKING “Simple is Good”, CitySavings offers a global and diversified multi-asset Exchange. On July 15, 1992 it was its clients simple and straightforward fund customized for high-net-worth granted the license to operate as This segment principally handles banking, coupled with warm and and ultra-high-net-worth clients. Both a universal bank. There were two loans and other credit facilities and helpful customer service reaching the of our organizations are collaborating mergers with the International deposit and current accounts for underserved markets in the rural areas on developing appropriate and timely Corporate Bank (Interbank) in 1994 corporate, institutional, small and of the Philippines. We have retained this sustainability metrics that will not and the International Exchange Bank medium enterprises, and middle market “small bank” personality while growing only comply with the regulatory (iBank) in 2006. customers. our network mainly through teachers, environment but also strengthen motorcycle, and microfinance loans. the role of sustainable finance in For the past 39 years, innovation has CitySavings is geared towards making facilitating endeavors that create been at the forefront of our thrust the financing experience for its niche social good, preserve the environment, to continually elevate customer customers easy and convenient, ensuring and make life better for many people. experience while committing high touch at any level of customer to enabling and empowering TREASURY interaction. Bancassurance partnership the underbanked and unbanked In 2017, UnionBank and CitySavings segments of the country. This segment is principally responsible entered into a bancassurance for managing the Bank’s liquidity and partnership with Insular Life Assurance UnionBank’s main operating funding requirements, and handling Company, Ltd. (Insular Life) for the businesses are organized and transactions in financial markets sale and distribution of Insular Life managed separately according covering foreign exchange, fixed income insurance products across the Bank’s to the nature of products and trading and investments and derivatives. and City Savings’ respective networks. services provided and the different markets served, with each segment UBX Blockchain partnership representing a strategic business With innovation and digital transformation In 2018, UnionBank entered into a unit. Our main business segments in mind, we launched UBX, our technology partnership with ConsenSys, a New are as follows: arm that houses initiatives, platforms, and York-based blockchain startup, HEADQUARTERS investments in fintech companies, with the to utilize Kaleido, an enterprise aim to make banking natural, open, and blockchain solution launched on top This includes corporate management, accessible through embedded banking of the Ethereum blockchain protocol support and administrative units not ecosystems. We want to positively that is used to process information specifically identified with Consumer impact financial inclusivity and business and transactions more securely and Banking, Corporate and Commercial growth through technology. We will build transparently. In connection with Banking or Treasury. platforms that bring businesses and this partnership, the Bank launched people together, provide access to needed “Project i2i” which aims to connect technology and services while creating rural banks and financial institutions marketplaces that aggregate supply and to the country’s main financial demand successfully. infrastructure and help bring unbanked Filipinos under the mainstream financial system. 6 | UnionBank 2020 Sustainability Report BUSINESS PRESENCE AND ECONOMIC CONTRIBUTION PHP 33.71 PHP 3.50 PHP 774.46 Billion Billion Dividend per Share P TOTAL ASSETS Revenue Generated PHP 88.53 Billion Market Capitalization *as of March 2021 PHP 5.78 Billion PHP 7.81 Billion Payments to Government Salaries of Employees PHP 8.50 Billion PHP 1.8 Billion Payment to Suppliers Innovation Expenses PHP 126 Million CSR Fund 5,177 >100 388 1,950,013 Workforce Products and Branches Nationwide New Customers Served *including CitySavings Platforms Provided *including CitySavings 54,035 1,225 SMEs using GlobalLinker platform SME Linker Stores Opened 8 | UnionBank 2020 Sustainability Report TECH-UP | 9 10 | UnionBank 2020 Sustainability Report hat role can UnionBank ABOUT W play in sustainable development? Our answer: Digital inclusion. Financial inclusion, THIS REPORT yes, but we are also at the forefront of the banking sector’s digital