PSE Circular for Brokers No. 297-00

February 9, 2000 PSE CIRCULAR FOR BROKERS NO. 297-00 Union Bank Nets P1.05 Billion in '99 UnionBank of the Philippines ended the year 1999 with a net income of P1.05 billion, making it one of the top three most profitable banks in the Philippines. The bank set aside an additional P600 million in loan loss reserves for the year, further boosting its loan loss reserve to P1.5 billion or a cover ratio of 72.6% of non-performing loans at year-end and estimates to be 100% covered in the next two years. cdlex The bank showed a Non-Performing Loan (NPL) to Total Loan ratio of 8.3% at year-end versus the industry ratio of 14.6% as of November. Total resources increased by 13.7% to P53.1 billion as of December. The growth in assets was largely in marketable securities as loan demand remained fairly weak. Total traditional deposits of the bank remained flat although its non-deposit liabilities grew by 25.2%. During the year, UnionBank launched several major initiatives, particularly in the areas of cash management, consumer finance and Internet banking. It has significantly built its credit card base and was recognized by Visa International with an award for best performance by a new member in 1999. llcd The bank launched the Business Check, a breakthrough product that enables small and medium-sized companies to streamline their checkwriting and disbursement processes with the application of technology. UnionBank was the first to introduce online banking through www.unionbankph.com. It allows customers to access their personal and business accounts, credit card, pay their bills, and even shop online. The bank aims to be the customer's connection to a single, full-service information source through which all transactions can flow quickly and conveniently. The bank's branch distribution strategy continued during the year, focusing on the relocation of some branches and the conversion of a few into 7-day kiosks located in supermarkets. At year-end, the bank had a total of 106 branches and 7 kiosks.