Justo Ortiz's Grand Plan

UnionBank aims to be in the top three in the banking industry by 20J0. And e-
business and the Internet will help get it there.
Story by Heinz Bulos
June 2002

t`s ree to dream. \hy not It
doesn`t cost a cent. So let them
dream.`

In 1995, a small uniersal bank announced
that it would be in the top ie in the
banking industry by the turn o the
century. No one took the relatiely
obscure Union Bank o the Philippines
seriously. In act, people oten conused it
with the troubled Urban Bank.
UnionBank`s Chairman and CLO Justo A.
Ortiz iidly recalls the arrogant and
cynical remarks o critics and competitors,
Let them try, it`s okay, it`s ree to
dream.`

A year beore the target date, UnionBank
ranked in the top ie. Suddenly, people
started to sit up and notice. During the
dot-com boom o 1999 and 2000,
UnionBank was being heralded as tbe
technology leader, making the Bank o the
Philippines - long proud o its tradition o
technological innoation - appear to be
playing catch-up.

But it was more than just riding the tech
bubble. UnionBank was hitting its
numbers. By the end o 2001, it was
number one in return on assets, number
two in return on equity, top three in net
proits, and number six in market
capitalization.

It also garnered its share o awards and
citations. 1o wit: 1he Banker lists
UnionBank as one o the world`s 25
soundest bank or our consecutie years,
1he Asian Banker awarded it Best Retail
Bank in the Philippines, linance Asia
named it among the top ie corporations
in e-commerce strategy, and the
Philippine \eb Awards honored its
unionbankph.com site with three key
awards.

1he CLO as celebrity
nionBank`s success didn`t happen
oernight. Ortiz says it`s been
eight years in the making. 1o
better understand UnionBank`s
achieements, we hae to set back the
clock to circa 1982 when it became a
commercial bank. Union Bank o the
Philippines was the product o a merger
o a saings bank and a troubled
inestment house. 1en years ago, it was
just another generic bank indistinguishable
rom the rest. In 1993, it acquired
International Corporate Bank ,Interbank,.
In the same year, the Aboitiz group, the
bank`s majority stockholders, was inally
able to conince a young Citibank
eteran, ellow Cebuano 1ito Ortiz, to
head the bank as Chairman and CLO.

Ortiz, reerred oten as JAO by
UnionBankers, was then in his mid-
thirties already a high-lying Managing
Partner or Global linance and Country
Lxecutie or Inestment Banking or
Citibank, N.A.

Ortiz joined Citibank right ater college, a
magna cum laude graduate o Ateneo de
Manila Uniersity`s AB Lconomics,
lonors Program, and went up the
corporate ladder in a little more than a
decade.

At 45, he`s probably the youngest CLO in
the banking industry. Among the old
oggies o the banking club, he looks like
I
U
a rookie. One can say that he was clean-
shaen in 1999 and 2000 to portray
UnionBank as a company o young and
dynamic employees, at the time when the
public adored twenty-something, dot-com
millionaires, and ully bearded in 2001 and
2002 to project a mature, experienced
persona or the bank when the tech
bubble burst. It may sound silly, but or a
bank ond o slogans such as \e make
da di!` and or someone who once
turned up at a company party as Neo
rom the moie 1be Matri to create the
right image, one can`t help but speculate.

As an aside, it`s interesting to note that
UnionBank has since cut back on the
Internet sloganeering and symbolism ater
the dot-com crash. Its annual reports o
1999 and 2000 were a blatant display o its
tech-sainess. Its 2001 annual report
coer is a bit subtle, but the symbols are
still there: a computer mouse on ire,
UnionBank20`, and e-xcellence`. It
also has played down the dot-com
rhetoric, re-emphasizing their traditional
corporate products and inancial
soundness.

1all and lean, Ortiz cuts a striking and
towering igure. \e irst interiewed him
in late 2000 or 1be !eb magazine`s
Moers and Shakers list. Len back then,
he exudes an aura o someone destined
or greatness. \hen he answers questions,
he speaks in a deliberate pace,
accentuating his points oten. le likes to
use the word clearly`, giing the
impression o assuredness.

le seems to be patient with people, at
least outsiders. During the photo shoot, a
ew minutes beore their stockholders`
meeting, he gamely poses, calmly
reminding us that he has to go. At the
stockholders` meeting, he keeps his cool
as he answers inane remarks rom a
couple o small inestors who neer ail to
speak up year ater year. One old-timer, a
certain Mrs. Marasigan, chides Ortiz and
entire board or bragging about the bank`s
achieements without giing glory to
God, perhaps rightly so. She then
demands quarterly stock and cash
diidends like what`s gien by their
generous rials`. Another inestor, a Mr.
Dulalia, commends them in broken
Lnglish or a job well done ,Our country
will become prosperity!`,, recommending
a bonus or the directors and oicers ,and
will they please gie een just a
transportation allowance or the
stockholders present in the meeting while
they`re at it,.

But certainly, when it comes to his bank,
he`s impatient or results. le`s a man in a
hurry. le likes to remind his top
lieutenants their end-date is just eight
years away, and the ultimate goal to be
number one will then be just within their
grasp. Don`t you want it to happen in
our lietime`

Ortiz`s media exposure has helped
perpetuate the public perception o
UnionBank as dierent, innoatie, and
tech-say. And it has turned him
somewhat into a celebrity. le narrates,
apparently amused, Once in Ayala,
somebody asked me to autograph their
LON |pack|. And I told him, well this
does not gie you beneits just because I
signed it.``

Despite the media attention and public
accolade, Ortiz doesn`t gie the
impression o a CLO with a huge ego.
\hen we asked i he liked their new
annual report coer, he said he did but
preerred past coers, which had
UnionBankers on them. In the end, it`s
all about people,` he says.

le doesn`t think o himsel as a celebrity
CLO or business hero, and doesn`t seem
to be inluenced by one, I`m not sure,
what I read are academic in nature rather
than personalities or biographies. I read
articles about people - Bill Gates, Jack
\elch, Roberto Gozuieta, and all these
guys - but there`s nothing in those articles
that are actionable. It`s all a lot o
motherhoods and philosophies. I cannot
honestly say that any one o them has an
inluence, I guess it`s all o the aboe.`

\hile he acknowledges the role o
leadership, he doesn`t think he`s any
dierent. Most leaders think big, it`s a
normal leadership quality. 1he dierence
is how you translate that rom merely a
dream, which can ery well turn out into a
nightmare, into reality.`

And he`s quick to pass credit to his team.
It`s more a question o listening with
each other. Maybe I start the ball rolling
with a particular idea but at the end o the
day, I think we hae a unique
management team with enough openness
to be able to deelop our own path that`s
unique to our skills, philosophy, and
market place.`

1urning point
hen Ortiz took oer as
Chairman and CLO, he
recognized the need to identiy
the disciplines he wanted the bank to
excel in: technology, product
management, risk management, and sales
capability.

1he turning point happened in 1994.
1eodoro Panganiban, Lxecutie Vice
President and head o Channel
Management and Process & Quality
Management, narrates, \hat they did, in
the merger o UnionBank and Interbank,
was that they junked the banking system
o both and bought a new system called
Systematics, which is the same system
used by BPI, Metrobank, and Citibank.`
1he system was so expensie that the
bank had to sell the building o Interbank
to be able to aord the new Systematics
CASA system. 1hat was a major bet. But
it placed us at the same leel as the
others.`

Just as important, the new system allowed
the bank to align its internal processes to
irst-world standards, in contrast to what
older banks did, which was to tinker with
Systematics, in eect contaminating` it
with third-world processes, as Panganiban
describes it.

It was this backend capability that made
UnionBank capitalize on technology as a
competitie adantage. Larly on, Ortiz`s
imperatie was to come up with
technology-leeraged products.

L-brands
he breakthrough technology-based
product was LON. Ldwin
Bautista, Lxecutie Vice President
and head o Retail Product Banking, is
largely responsible or the success o
LON, an Internet-based deposit account.
I anything, it established UnionBank as
the leader in Internet banking in the eyes
o the media, inestment analysts, and the
general public.

UnionBank was hailed as a pioneer,
claiming to be the irst in Internet
banking, een though Urban Bank
introduced \eb-based banking earlier in
199, which turned out to be a dud.
Neertheless, the association has stuck.
Len as competitors belatedly launched
better Internet banking acilities, online
banking remains synonymous with
UnionBank.

1he high-proile marketing campaign,
which came straight rom the consumer
marketing handbook, positioned LON as
\
1
the new way o banking. It screamed non-
traditional! young! cutting-edge!

1he result: around 185 thousand new
depositors. \ith a single product, it has
doubled its retail deposit base in a ew
years. 1o put that in perspectie, beore it
launched its Internet initiaties, it had
about 185 thousand regular accounts and
120 branches. LON, in other words, is
roughly the equialent o putting up 120
branches.

1hat`s the good news. 1he bad news is it`s
not proitable. Bautista explains that LON
account holders are generally Internet
early adopters o two arieties: those in
I1-related industries and, to a larger
extent, college kids. Unortunately, a
large part o that does not hae the
money. \e hae 185 thousand customers
in LON, which is the same size as our
regular accounts in terms o number, but
way, way below in terms o the balances
that they keep. But they are the market o
the uture.`

UnionBank is making a gamble that these
college kids, short on cash but rich in tech
skills ,and preerring to do business
through electronic channels,, will grow up
to become high-income generating
proessionals, staying loyal to UnionBank,
which understands their needs. Ortiz is
also betting that 10 or 20 years rom now,
the Internet would hae become more
perasie and online banking, more
mainstream. le`s willing to wait because,
as Bautista quips, that`s the adantage o
haing a CLO who knows he`s going to
be around in the next 20 years.`

In the year 2020, when Ortiz has reached
retirement age, it may not be ar-etched
to think that Internet banking in whateer
orm or name will be the norm.
Panganiban says, In the uture, money
will not be in the paper bills you see and
the coins. It will be just a number in your
account or an entry in your smart card.
\ou`re just moing alues rather than
physical coins and paper. 1he medium o
exchange will be electronic, no longer
physical. \hen you get to that, you hae
to be ready.`

Ortiz talks about the rationale behind
their strategy, Banking is a ery inelastic
business. It`s irst come, irst sered. 1he
minute you open an account with a bank,
it`s highly unlikely that you`re going to
change it.` le tells a aorite anecdote
about, o all things, the toothpaste
business, Close Up made a 15-year
inestment and they targeted the youth.
1his was a Colgate market, that was the
taste. An adult at that time will neer
dream o using Close Up, because it
would taste unny. But they appealed to
the youth. 1he youth got used to that
taste, and when they became adults, that`s
what they bought. It took a whole
generation. 1hat`s the same situation in
terms o our customer ranchise.`

Bautista clariies that the bank is willing to
inest in the uture, proided carrying
them into the uture does not entail
tremendous costs. It has since dropped its
ree ISP model when it launched LON
or instance. But LON itsel is a cost-
eectie way o getting and maintaining
customers. 1he estimate cost per online
transaction is >0.10 compared to >0.2 or
A1M and >0.81 or oer-the-counter
transactions. 1he signiicant saings rom
not giing out passbooks and bank
statements as part o the appeal o LON
is a marketing coup.

1he inancial portal, unionbankph.com,
was award-winning and highly isited but
it also was airly successul as a sales
channel. Bautista says that it was neer
eyeball-oriented, \hat`s important to us
was what we could sell. \e look at it as a
channel. \e sold a lot o LONs on the
Net, a lot o credit cards.` Panganiban
adds, \e een sold ROPOA, oreclosed
properties, on the Internet. 1his is a
reelation, bati/ba,av. saw this rom
abroad and told their amilies to join our
auctions.` Last year, UnionBank sold
P500 million worth o oreclosed
properties, and the Internet was
instrumental in the entire process.

1op management was so serious about its
Internet banking site, and its loss to IDS
linance at the 2000 Philippine \eb
Awards in the Banking and linance
category, to the point o pirating IDS`
\eb programmers. 1he moe, apparently,
paid o.

On the other hand, the Visa Llectron, a
debit card designed or online purchases,
and 1he Port, a payment gateway or e-
commerce sites, were both launched at
the time when the Internet hype has died
down, and it seems it will be some time
beore the market is ready or them.

It`s in corporate banking, howeer, where
e-business has translated to real and
immediate, not just uture and potential,
reenues, particularly in the area o cash
management and settlement, with
products such as Union el1,
BusinessCheck, LIPP, and Checkwriter.

1hat one is real money today and it`s an
innoation in the sense that customers,
mostly multinational companies, neer
een considered UnionBank as an
alternatie banker,` says Ortiz. Now,
clearly a lot o that innoation come rom
listening to customers and be willing to
customize or create products that are
unique to their particular needs.`

lrom customizing products or large
clients, UnionBank was able to mass
produce products with lesser
customization but distills the essence o
what a customer needs. Ortiz explains, A
good example is our BusinessCheck,
something we sell to small and medium
enterprises. It doesn`t hae all the eatures
o the product we`re doing or Procter &
Gamble but the basics are there.`

1hrough technologically innoatie
products, UnionBank was able to
penetrate new market segments. \hereas
beore, its retail customers were rom the
upper C class, now it has been able to
attract the A and B markets. On the
corporate side, rom small and medium
sized companies, it now counts many
large corporations as clients.

But perhaps the greatest impact the
Internet and e-business has on
UnionBank is in brand equity. Ortiz
himsel admits, I don`t know i it`s by
design or by luke, the UnionBank brand
will be nothing, it will be lost in the crowd
i it weren`t or this shine that we hae on
technology initiaties. \hat`s UnionBank
in your head Is it about lending money, is
it about depositing money No, it`s about
e-business. It might be small, we`ll be
lucky i we hae 1 o banking reenues
but we hae been able to ind a
positioning that`s unique to UnionBank by
being irst.` le quips, UnionBank, it`s
not een an exciting, sexy name.
Somehow it`s in the minds o people.`

\hat we`e achieed is we`e been able
to brand ourseles and it`s ery clear. It`s
not obuscated, it`s not diused. It`s ery
precise. It`s not cluttered. \hen you think
o UnionBank, or better or or worse, the
next word you think o is technology, not
car loans or credit cards. lopeully we
can leerage that.`

Putting the e in efficiency
nionBank is also leeraging
technology in streamlining its
processes, what Ortiz calls e-
management. lor a lot o these e-
solutions, one thing is clear, that it is
demanding. It`s demanding as to time, it
must be aailable 24x. It`s demanding as
to response. It`s not like waiting in line 15
minutes in a branch and that`s okay, you
won`t wait or 15 minutes in your
computer, so we`re talking seconds here.
It`s more demanding in terms o content.
I it`s the same thing you see once a day,
pretty soon it`s stale, boring. \hat does
that imply to the institution \hat it tells
me is i I can align my operating processes
to the most demanding channel rather
than hae a dierentiated process or my
call center, or my branch, or the A1M,
or the Internet, or whateer, then I
would hae created, by deinition, a
hugely cost-eectie process low.`

1hat requires a radical rethink. It dries
me to digitize all my inormation to begin
with because you don`t know where the
customer is going to hit you. It requires
me to hae a central customer databases,
all sorts o security controls, and
identiication methodology. It requires a
certain attitude o the people behind this,
a certain rame o mind, or urgency and
accuracy. 1hat`s the challenge and
technology can make it possible. And
that`s the process we`re doing now.`

As part o the Bayan1rade consortium,
the bank has also beneited rom saings
in online procurement and auctions. Says
Panganiban, Inside the bank, the saings
rom procurement is not that big, as we`re
not a manuacturing company. But or our
new building, all our contracts are now
bidded out through Bayan1rade. And
these are huge numbers, that building is
worth P1.8 billion. 1he last one we had,
P14 million went down to P9 million.
\hen you talk o construction, that`s
about 15 to 30 saings.`

1he latest initiatie is the corporate
intranet, myunionbankph.com, which
eatures product team updates and reports
as well as corporate circulars and orms.
lresh rom the success o
unionbankph.com, the bank decided to
apply the concept internally. \e didn`t
realize that we were already doing what
you now call knowledge management.
\hen we started this we were just saying
let`s start a \eb site that eeryone can
access`,` Panganiban notes.

1he intranet gies senior executies like
Ortiz instant access rom anywhere on
what`s happening in the company. lor
example, i he wants to check how the
credit card operations is doing rom a
serice standpoint, he can simply log on
een i he`s at home, and iew the
progress charts. It cuts down on the need
or meetings and rees up people or more
productie work. lRonline, what Bautista
calls in jest their intranet`s killer app,
contains memos, orms, and most
importantly, payroll details. By distributing
irtual pay slips, all UnionBankers are
orced to use the company intranet. At the
same time, it saes the company the cost
o paper and printing. By going paperless
using CommerceOne, it has been able to
sae P15 million in continuous orms and
the like. 1he lR department also
becomes more productie. Panganiban
explains, On loan applications, eeryone
calls up lR. low much can I borrow
\hat`s my cash adance My acation
leaes It rees them up to do more
productie actiities instead o answering
routine questions.`

Making the da diff
e asked Ortiz why UnionBank`s
competitors hae been slow to
adopt, or conused about, e-
U
\
business strategies. I think it`s because
they didn`t hae to. 1hey owned the
market, they occupied the space. 1here
was no challenge and you add to that the
low |Internet| penetration, they couldn`t
een make a business case or it. In our
case we hae to ind something that
would dierentiate us. And that was the
obious thing. \e committed ourseles
into transorming not into an Internet
bank but to a bank that was releant to
the Internet age.`

le adds, \ou know ery well that
motiation is a ery powerul orce. \e
hae the motiation, the others didn`t, to
the extent that it created a challenge or
us, but I don`t know i they see it as a
challenge. It`s more like, we just need to
hae it, eerybody has it, so let`s hae it
too`.`

Bautista agrees, 1he reason we are
successul is we beliee in it
wholeheartedly. 1he way I understand it,
the other banks treat it as insurance, they
just want to be there in case it becomes a
big thing. As opposed to us, we want to
lead.`

1he aorite line here is guys, we don`t
hae 150 years`. Because we`re a bank in a
hurry, rom a strategy standpoint, you
cannot simply copy what they`re doing
because you will just grow at the same
pace as them. 1he question is how to
execute it and the answer is, whateer it is
it`s got to be dierent rom the big boys.
1hat orces people to think dierently.
1echnology happens to be one o those
areas which we think we can make a
dierent approach.`

Culture of experimentation
ne key element to UnionBank`s
success in e-business is its
culture o innoation and risk-
taking. It helps that the aerage age o
UnionBankers is 2 ,a deliberate eort by
the way,, making the bank more lexible
and open to resh ideas. Ortiz has recently
organized the bank into product teams,
combining a unctional organization with
a network structure that promotes
cooperation and collaboration. \e do a
lot o experimentation where we just do
things. \e can`t justiy it, there`s no
analysis, acts, data, it`s purely instinctie
and we do it. Most o the time it ails but
once in a while it works. \ou just need a
ew o those successes. As a philosophy,
we experiment a lot but within ery
deined limits, so we can neer break the
bank.`

le adds, \e do a lot o things on a
hunch. \e spend about roughly 20 o
our regular capital expenditures on
experimentation rom a resource
allocation point o iew. Now that we
hae this product team concept, there`ll
be a lot o more o that going on.
lopeully the outcome o that are insights
that you couldn`t possibly igure out in a
acuum or some sort o analysis with
ocus groups, sureys, what not.`

It`s like LON. low do you explain
LON \hat is it \e hae as many LON
account holders as our regular accounts.
low \hy Is there an explanation I
cannot understand what buttons we
pushed. I you asked me how to replicate
it, I don`t hae an answer. Maybe nobody
does. It`s an experiment that worked.
\hat`s LON It`s a stripped down A1M
account. In act I would complain about
it. \ou mean I don`t get statements, I
don`t hae passbooks, you mean I can`t
withdraw oer the counter \hat kind o
lousy account is that` \et i you look at
our ads, that`s precisely what LON is all
about. No passbook, no lines, no
statements.`
O
|And it says|, \ou`re dierent, you`re no
dinosaur who needs all these stu. 1hese
are or the old olks. \e`re young, we`re
modern, we want to do our banking while
drinking coee, we want to do our
banking at home.` And that struck a
chord. \ou tell me, what is it It`s not a
great moneymaker but certainly in terms
o 200 thousand cardholders, where did
that come rom It`s hard to beliee, it`s
hard to explain.`

Still, UnionBank is quick to emphasize
that being dierent doesn`t mean eering
away rom its core business. Bautista
dismisses the possibility o spinning o a
tech subsidiary, It`s not a question o
spinning it o. Banking itsel is going to
be transormed. \e`re changing the way
we do banking but at the end o the day
we`re still a bank.`

le adds, Our tools are new economy but
our objecties are still old economy. \e`re
talking customer acquisition, ees. \e
cannot lose sight o the act that we`re a
bank, two we need to make money. \e`re
ery tough on making money. \e`re
obsessed on return on equity o our
shareholders.`

1echnology has made a tremendous
impact to UnionBank`s bottom line. Net
income or 2001 was P1.1 billion, 32
higher than the year beore. Net income
margin is 22. Return on equity was
9.2, way aboe the industry aerage o
2.6. In terms o reenues, the
contribution o e-business products is
both direct and indirect. Serice ees in
act are insigniicant in proportion to total
reenues. But by oering technologically
adanced and \eb-accessible solutions
particularly or the corporate market,
which is becoming more demanding and
increasingly inclined towards technology-
based products, it has been able to capture
a bigger pie. Len as multinational
corporations consolidate their cash
management on a global or regional basis,
they make an exception or the
Philippines, due to UnionBank`s
innoatie solutions. Its corporate cash
management business, which already
contributes 21 to net income, allows the
bank to take adantage o the unds low
to earn interest.

A key reason or UnionBank`s healthy
proitability is that it`s one o the most
eicient banks around. 1his is where
technology is making the most impact. Its
cost to income o 0.60 makes it the lowest
in the industry. Since its merger with
Interbank, it has ceased expanding its
branch network. Instead, it relocated
branches to more strategic locations,
lowered rental cost, and downsized them
so that just ie people can operate a
branch. Its strategy or customer
acquisition and market reach may be
limited geographically, but the use o
innoatie products is working to gain
more corporate clients. Its inancial portal
is key in getting retail inance customers,
especially or its ast-growing business in
credit cards, auto loans, and mortgage
loans. Using the Internet as a distribution
channel as a low-cost deposit generation
tool is certainly helping.

Still, a major concern among inestment
analysts is UnionBank`s weak deposit
ranchise, or a medium-sized bank at
that. It ranks in the high teens in total
deposit accounts o about P28 billion, a
mere 10 o the top bank. Neertheless,
that represents an increase o 15 rom
2000, and 23 beore that. UnionBank
wants to proe that size and scale do not
matter. LON and unionbankph.com are
helping increase accounts in terms o
numbers, and its cash management
business is proiding the increase in alue.
1he combination o innoatie products
and distribution channels enhanced by
technology has been an important actor.
Its innoation ratio - reenues rom new
products and businesses introduced in the
last three years - is now at 32, rom
15 in 1999.

It is also outsourcing more o its backend
operations to its Cebu-based subsidiary
Union Data Corporation to take
adantage o lower production costs. Its
break-een leel or its credit card
operations is the lowest in the industry
largely because o this. In addition, it has
employed automated credit scoring,
eliminating the need to hire more credit
analysts. 1echnology enables this kind o
automation and internal communication.

1he bank also hired its linance Controller
rom Procter & Gamble, bringing the cost
discipline o a manuacturer. Its
Operations Controller is rom Intel,
adding a quality discipline to operations.

Its Project Delta continues to drie down
costs and improe productiity. Its total
manpower is now around 1,600, rom
2,400 in 1994. All those saings and
productiity rom the use o e-business,
rom online procurement to knowledge
management, add up.

IOCUS 20J0

n January 2002, UnionBank
celebrated its 20
th
anniersary. And
appropriately, it cooked up a new
slogan: Drien with passion, powered by
e-xcellence.` UnionBank is ired up to
meet its new challenge - to be one o the
top three most aluable banks by 2010. Its
target is to hae 1.5 million retail
customers and 3,000 corporate clients. Its
battle cry is lOCUS 2010, which stands
or inancial alue, operational excellence,
customer ranchise, UnionBank
brand,experience, and speed o
innoation.

Ortiz explains, 1he consensus is our own
people need to make da di`. In order to
achiee those goals, you got to do things
dierently. I you do exactly the same
thing, you`ll be in the exactly same relatie
place. \e`re not going to catch up with
BPI by doing what they do. 1he odds are
stacked up against us because they`re the
leader. 1hat means taking a risk. Because
we`re not ollowing the herd, which is the
sae way, there`s no guarantee o success.
Lither through luck or skill, or a
combination o both, we chose to be
dierent, we`e taken the risk, and we can
now speak about it with some measure o
success. Now we got to carry it on urther
and see i we can continue with the
success.`

It will be at most eight years beore we see
i UnionBank`s strategy will work. But i
the past ew years and the irst quarter o
2002 are any indication, it appears it`s on
the right track. Already, its net income or
the quarter one is P506 million, hal o
what it earned the entire 2001, and double
that o the same period last year. And it`s
due to robust earnings rom its electronic
banking, cash management, treasury-
related businesses, priate banking,
consumer banking, and other ee-based
businesses.

O course, there are other key
perormance measures or the banking
industry aside rom earnings. Capital
adequacy and liquidity, or example,
though UnionBank has no problem here.
Asset quality is another, though it`s
soling its problems with non-perorming
loans ,NPLs,. And one can`t dismiss the
giants like BPI and Metrobank, they aren`t
big or anything. 1here are no guarantees.
Ortiz acknowledges this, 1his is sort o a
work in progress, it`s not a ormula. Are
we ensured o success It`s hard to say.`

I
Neertheless, aiming or top three or een
number one doesn`t seem as daunting, or
een impossible, as beore. Ortiz airms,
UnionBankers beliee. \hen I said top 5
beore, I don`t think een they belieed.`
1op 3 now seems more achieable or
them, their rationale being beore, the
bank came rom something like number
20, and now it`s just two steps away.

low about the outside world I don`t
think they will be as cynical as they were 5
years ago. 1his time they might think it`s
diicult, but maybe. 1he response beore
was ery arrogant. 1here`s now a healthy
respect. Certainly there`s more
credibility.`

Justo Ortiz dared to dream and took the
risk. No one`s laughing now.