Table of Contents

03 06
I. Defining the II. Message from
Elevated Life the Leaders

08
15
III. Financial and
IV. Managing
Operational
Risk
Highlights

20 37 38
V. Leadership in VI. Corporate VII. Consumer
UNO Digital Social Responsibility Protection
 40 44
VIII. Sustainability IX. Risk Exposure and
Assessment

48
X. Audited Financial
Statements
Achieving an elevated life is
within everyone’s reach, and UNO
Digital paves the way for Filipinos
to have it.
Launched in 2022, UNO Digital is the first full-spectrum digital bank licensed by
the Bangko Sentral ng Pilipinas in Southeast Asia. It aspires to make an elevated
life achievable through a new approach to banking: simple, better, and accessible.

Simple banking is having a single trusted interface to meet life’s full financial
needs with speed and ease. UNO Digital provides a convenient way where
customers can save, borrow, transact, invest, and protect — all in one platform.

Better financial transactions mean every need is met, every desire is considered,
and every living condition is made comfortable. UNO Digital enables transactions
that are easy, fast, and accessible. Customers have a reliable resource for
when they need assistance, with products and services tailored to their exact
requirements.

Accessibility allows every generation — young, old, underbanked, and unbanked,

to have equal access to every financial service and enjoy mutual benefits.

In a digital world where financial needs are constantly evolving and lifestyles are
ever-changing, UNO Digital aims to bring banking to every Filipino’s fingertips,
making the elevated life achievable for all.

04
4 | UNO Digital Bank I. Defining the Elevated Life
Elevating U
1st full-spectrum digital bank
licensed under the Bangko Sentral
ng Pilipinas in Southeast Asia

Pioneer of digitally meeting

your financial needs

VISION
Provide Filipinos with simpler, better,
and accessible banking for an elevated
life.

MISSION
Create a single, trusted interface to
meet your life’s full financial needs
with speed and ease.

BRAND PURPOSE
Elevating you by making banking
simpler, better, and accessible.

COMPANIONS
Transactions Investments
Savings Protection
Loans

I. Defining the Elevated Life UNO Digital Bank | 05

5
Message from
the Leaders

“
UNO aspires to be at the
leading edge of financial
innovation and bring
best-in-class products
and services to the tens
of millions of ordinary
Filipinos who are served
by the traditional banks.
The access to products and
services is expected to help
them improve their life by
offering them flexibility,
convenience, personalization,
and control.

Kalidas Ghose
Chairman and Co-Founder
”

06
6 | UNO Digital Bank II. Message from the Leaders
“
We are committed to
providing Filipino people with
a simpler, better, and more
accessible digital banking
experience for elevated lives.
We continuously pursue
innovation and strive to
ensure alignment with
our customers’ long-term
financial needs, serving as
their reliable and steadfast
companion on their financial
journeys – whether saving,
borrowing, settling bills and
payments, or even protecting
their health. We empower
our customers to improve
their financial management
journeys.

Manish Bhai
CEO and Co-founder
”

II. Message from the Leaders UNO Digital Bank | 07

7
Details in Digital:
UNO’s Journey

2023
December: 1,000,000 customers

April: Released R1EVersion (Dark Mode)

#UNOnow Quick Cash loan (for NTB Customers)

2022
December 22: Closed User Group
Testing in GSave

October 21: Launch announcement of UNO

Digital Bank at the Philippine Fintech Festival

October 19: Availability of the UNO bank app

in the App Store and Google Play Store

September 19: UNO Digital Bank goes

live in PESOnet

July 5: UNO Digital Bank’s Day 1 of Operations

June 7: BSP grants UNO the Certificate

of Authority (COA) as a digital bank

2021
October 27: UNObank Inc. was incorporated
into the local operating company, Uno Digital
Bank

June 7: BSP grants UNO Digital Bank

permission to operate as a digital bank

08
8 | UNO Digital Bank III. Financial and Operational Highlights
Elevating Life through an
AI-First Approach to
Customer Onboarding
UNO Digital is a bank driven by the
vision of serving Filipinos — including Status of Banking
everyone in the general population,
particularly the unbanked and in the Philippines
underbanked.

To address this need and allow

Filipinos to start living elevated lives,
and to extend credit to those previously
excluded from conventional lending

9% 34%
systems, UNO Digital employs a
partnership ecosystem and an AI-first
approach for the consumer onboarding Consumer Traditional
process. This approach provides Credit Bank Accounts
alternate data-based scoring to those
who may not have traditional credit
histories.

UNO Digital provides people the

opportunities to start. With access to
credit, people will be empowered to
start and grow businesses, invest in
education, and improve their overall
66% 54%
No access to Borrow from
living standards.
basic banking informal
services lenders

III. Financial and Operational Highlights UNO Digital Bank | 09

9
Making Banking
Accessible
Across
Generations
Through
Technology
Today’s fast-paced world makes
individuals seek solutions that simplify
their finances. This allows them to
allot more time for things that matter
more. The goal of the single interface
is to enable consumers to save, borrow,
transact, invest, and protect their
resources — all within one ecosystem
through a mobile application.
Available to consumers in the App Store
and Google Play since October 2022

Quick and Convenient Anytime and Anywhere Financial transactions in

banking one single application

This integration fulfills the goal of making transactions accessible for all
generations, regardless of location and demographics. The interface allows them to
have an overall view of their financial needs, including how much is deducted and
how much they need to pay.This creates a bank to consumer relationship founded
on transparency and sustainability

UNO Digital’s innovative app development process is reliant on consumer needs

and wants, guaranteeing that every product is tailored to make digital banking as
frictionless as possible, eliminating barriers to consumer adoption.

10 | UNO Digital Bank III. Financial and Operational Highlights

UNO Breakthroughs and Progress
For the Bank’s initial year of operations, focus was placed on these critical items:
• Launching Products with relevant and differentiated benefits;
• Optimizing UNO Mobile App reliability
• Establishing strategic partnerships with other industry players.

These are critical items in scaling the business and ensuing sustainability of the
brand in the market.

UNO Digital Moving Forward

UNO Digital is taking concrete steps to build a sustainable future for itself and
its partners, utilizing cloud-based infrastructure to significantly reduce energy
consumption and carbon emissions.

The company is also aiming to financially educate its consumers, enabling them to
make informed financial decisions beyond the use of its services and products. This
initiative allows Filipinos to build a solid foundation to reach their goals.

In a few years, UNO Digital aims to develop a system faster than the legacy
players, using an ML and AI-based approach to improve customer preferences and
comply with regulations. It is building a world where the elevated life is accessible
and achievable for everyone.

Cloud-based Reducing carbon Responsible sourcing

infrastructures footprint practices

Financial education Improve services

for consumers using ML and AI

III. Financial and Operational Highlights UNO Digital Bank | 11

11
Financial and Operational
Highlights

2023 Total Assets Net Loans

6.84 Billion (Increase of 5.054 Billion from 2022) 920 Million (Increase of 27.1 Million from 2022)

Deposit Liabilities Increase in Capital Infusions

4.8 Billion 911 Million

Launch of Different Services

#UNOready Partnership #UNOearn Time

Savings Account Integration in its Deposit
savings marketplace

Singlife Virtual Debit Mastercard

Financial Protection Online transactions + seamless
and Insurance shopping

12 | UNO Digital Bank III. Financial and Operational Highlights

Products and Services

1 #UNOready
• Savings account
• Offers no minimum initial
deposit or maintaining
2 #UNOboost
• Time deposit
• UP to 6.50% interest p.a.
• Flexible terms
balance

3 #UNOearn
• Time deposit
• UP to 6.50% interest p.a.
• Enjoy monthly payouts
4 #UNOnow
• Loans
• Borrow up to P200,000
• No collaterals and
guarantors needed

5 Virtual Debit
Mastercard
• Securely shop online with
6 Pay Bills
• Settle payments fast and
easy
Mastercard-accepting
merchants worldwide

III. Financial and Operational Highlights UNO Digital Bank | 13

NUMERO UNO Priority:
Customer Satisfaction

4.4
“ UNO’s Free cash-ins, free transfers, in-app bill payment, scan to pay/QRPh,
virtual debit. I just hope that free cash-ins via 711 stay forever as it is the
most important feature of UNO that made me sway. All other digital banks
have convenience fees or linked other bank accounts just to be able to

”
deposit, which literally kills the very idea of a digital bank. Kudos to UNO!

- Nonoy Barruga, App user

“ User-friendly and Fast Customer Service: I had a problem with my Gcash

savings since I lost my sim. I called the UNOBANK customer service
number and they immediately answered. In less than a week, they were
able to transfer my funds from my old account to my new account. Thank

”
you so much.

- NIcnic0612, App user

“ Kudos to UNO Digital Bank CS representatives they are always very active
online in addressing my concerns even during weekends and holidays.

- Truj Valeria
”

“ Thank you UNO Digital Bank for the high interest! ”

- Kier Gonzales

14
14 | UNO Digital Bank III. Financial and Operational Highlights
UNO Risk Management
Framework
The Risk Culture at UNObank consists of norms, attitudes and behaviour related
to risk awareness, risk-taking and risk management, and the controls that affect
decisions on risk.

The Board of Directors, Senior Management and all employees of the Bank
contribute to the creation of a sound risk culture at UNObank. Clear governance
structure, policies, and procedures, support the creation of a sound risk culture.
Ultimately, the risk culture is created by day-to-day actions and the way key
decisions are made and communicated. Cooperation and constructive dialogue are
part of the sound risk culture, as they foster an environment of open communication
to reach common goals.

The Bank aims to achieve a high level of competence by supporting each other
across business units by sharing information, skills and experiences. A sound
risk culture enables the organization to do the right thing, even in challenging
circumstances, and it supports the organization to identify its risks, and to adhere
to its values and principles of high ethical standards. It’s everyone’s responsibility to
contribute to a sound risk culture.

UNObank’s risk culture fosters high levels of risk awareness where existing
practices are critically reviewed and challenged. Constructive challenge is
encouraged and is a natural part of discussions and decisions on risk-taking, risk
awareness and risk culture.

As part of an open culture, employees are encouraged to escalate and highlight

issues, if any, through various management meetings/forums.

IV. Managing Risk UNO Digital Bank | 15

UNO Risk Appetite and Strategy
The Bank’s risk-taking is primarily in its core activity of lending to mass, upper mass
and mass affluent individual customers in Philippines. The Bank funds its activities
through deposit acquisition, equity infusion, direct funding by investment entities
and through borrowing in the local market. The Bank’s operating model relies on its
ability to obtain funding at a favourable cost, which enables its lending program,
which is expected to have a tenor ranging between 1 month to 36 months, at
launch. To support its lending and funding operations, the Bank maintains a
portfolio of liquid assets of optimal size. The primary objective of the liquid portfolio
is to ensure that the Bank is able to operate and continue its core activities even
in stressed market conditions. The composition and maturity of the liquid portfolio
are aligned with this objective, in addition to the reserve ratios that are mandated
by the BSP. The Risk Appetite sets the tolerance for risk-taking in the Bank’s
operations within the bank’s risk-bearing capacity. Risk limits and risk profile
assessments are within the Bank’s risk appetite framework.

Risk-bearing capacity is defined as the financial and non-financial resources that

the Bank has at its disposal. The risk appetite is to set a level within the risk-
bearing capacity to ensure that the Bank’s risk exposure remains sustainable.
Financial resources consist of the Bank’s paid-in capital, deposits, and retained
earnings. Non-financial resources are the skills and competencies of the staff, IT
systems, internal procedures and control systems. The Bank’s risk-bearing capacity
builds on a careful customer underwriting process. Therefore, financial resources
and robust governance contribute to maintaining the Bank’s competitive position
and its strong capital and liquidity position.

The Risk Appetite Statement is a written articulation of the Bank’s risk-taking,

risk mitigation and risk avoidance, taking into consideration the Bank’s statutory
requirements. It contains risk type specific statements and forms a tool for the
Board of Directors and senior management to guide and monitor the Bank’s risk-
taking activities.

16 | UNO Digital Bank IV. Managing Risk

The Risk Appetite Statement is a written articulation of the Bank’s risk-taking,
risk mitigation and risk avoidance, taking into consideration the Bank’s statutory
requirements. It contains risk type specific statements and forms a tool for the
Board of Directors and senior management to guide and monitor the Bank’s risk-
taking activities.

Risk limits are used to allocate the aggregate risk-taking mandate to business lines
and portfolios. The main risk limits are established in the Bank’s risk management
policies and/or in its annual Business Plan. The limit system sets boundaries for the
accepted levels of credit, market, interest, liquidity, operational, reputational, IT and
information security risks, within the established risk appetite.

Risk Profile assessment aims to ascertain the Bank’s risk profile within its risk limits
and consequently with the risk appetite and risk-bearing capacity. This is a point-
in-time evaluation of the level and types of the Bank’s risk exposures and includes
an evaluation of the Bank’s material risks. The risk profile assessment is based on
the Bank’s internal capital adequacy assessment process (ICAAP). The resulting
capital and liquidity requirements are compared against the Bank’s risk appetite
and risk-bearing capacity. This process creates a continuous interaction between
Risk Appetite Statement (RAS) and ICAAP. RAS affects the bank’s risk profile and
risk-bearing capacity; these in turn may affect how the bank sets its risk appetite.

IV. Managing Risk UNO Digital Bank | 17

UNO Risk Governance Structure
The operating model of the Bank’s Risk governance structure is comprised of three
lines of defense. These three lines provide a clear set of principles by which to
implement a cohesive operating model and provides a framework for managing risk
across the organization.

GOVERNING BODY (BOARD OF DIRECTORS)

Accountability to stakeholders for organizational oversight

1ST LINE OF DEFENSE 2ND LINE OF DEFENSE 3RD LINE OF DEFENSE

Business Management Independent Risk & Control Internal Audit

Functions Functions (Risk, Compliance) Function

Providing of banking / financial Expertise, support, monitoring and Independent and objective
products / services to clients; challenging on risk-related matters assurance & advice on all material
managing risk while of banking / financial services. related matters to achievement
doing this business function. of objectives.

The first line of defense includes management and supervision responsibility

for owning, managing and supervising, within a defined risk appetite, the risk
in business areas and support functions. The guiding principle is that those
responsible for risk-taking are also accountable for managing associated risks.

The second line of defense provides oversight and control, including responsibility
for leading risk culture and appetite and analyzing the aggregate risk profile to
the desired level (risk appetite). Additionally, it oversees the development and
deployment of risk management tools utilized across the organization, involving
periodic reviews, executive committee meetings, management information systems,
and risk event reporting.

The third line of defense includes the responsibility of internal audit for reporting
any matters that warrant escalation to the Bank’s board, audit committee or
executive committee. The Board is ultimately responsible for the system of risk
management and internal control. The Board implements the controls through
dedicated expert board-level committees, e.g., Risk Oversight Committee, Audit
Committee, Corporate Governance Committee. At an executive level, the Chief Risk
Officer (CRO) is responsible for adherence to the Risk Management Framework for
the Bank and the effectiveness of the implementation of the system. The CRO, the
Chief Executive Officer (CEO) and the Risk Oversight Committee in turn implement
the governance through a series of executive level committees, which are directly
responsible for designing, implementing, monitoring and reporting on the various
types of risks taken by the Bank.

18 | UNO Digital Bank IV. Managing Risk

UNO Anti-Money Laundering /
Terrorist Financing Governance
The Bank employs a multi-layered risk management framework to prevent the
risks of money laundering and terrorism and proliferation financing. It prioritizes
the implementation of a robust risk management framework that encompasses
significant areas of customer due diligence, client profiling and risk assessment,
ongoing monitoring using technology/systems, reporting of covered and suspicious
transactions and sanction screening, to comply with the regulatory requirements
and at the same time safeguard the integrity of financial system. The framework
also includes the training and awareness of all employees, including the directors
and third-party service providers, on the updates of the regulations of money
laundering and other financial crimes.

The Board of Directors, through the Corporate Governance Committee, plays a

crucial role in providing oversight, guidance and strategic direction in supporting
the functions of anti-money laundering and counter terrorism and proliferation
financing.

IV. Managing Risk UNO Digital Bank | 19

UNO Corporate Governance
A. Overall corporate governance structure and practices

The Shareholders, Board of Directors, and Senior Management of UNObank

Inc. share the principle that a sound corporate governance should be one of
the pillars of the Bank’s foundation, not only for the success of the Bank, but
to create sustainable value for the Bank’s stakeholders, including its clients,
suppliers, counterparties, the Philippine Government, and the Philippine banking
and financial system. The Bank fully agrees with the Securities and Exchange
Commission that corporate governance is the proper system of stewardship and
control which shall guide the Bank in fulfilling its long-term economic, moral, legal
and social obligations towards its shareholders/members and other stakeholders.
It shall provide a system of direction, feedback and control using regulations,
performance standards and ethical guidelines to hold the Board of Directors and
Senior Management accountable for ensuring ethical behavior and reconciling
long-term customer satisfaction with shareholder/member value to the benefit of all
stakeholders and society.

B. Selection process for the Board and Senior Management

The Board of Directors shall be elected during each regular meeting of stockholders
and shall hold office for one (1) year and until their successors are elected and
qualified.

At least 1/3 but not less than two (2) members of the board of directors shall
be independent directors and any fractional result from applying the required
minimum proportion (i.e. 1/3) shall be rounded up to the nearest whole number.
An independent director is one who is independent of management and free from
business or other relationship which could, or could reasonably be perceived to,
materially interfere with his exercise of independent judgment in carrying out his
responsibilities as director and must possess all the qualifications. and none of the
disqualifications, as prescribed by the Bangko Sentral ng Pilipinas, Securities and
Exchange Commission, and other regulatory authorities, from time to time.”

The Board may, from time to time, appoint officers as it may determine to be
necessary or proper. Any two (2) or more positions may be held concurrently by the
same person, except that no one shall act as President and Treasurer or President
and Secretary at the same time.

20 | UNO Digital Bank V. Leadership in UNO Digital

C. Board’s overall responsibility

The Board should act on a fully informed basis, in good faith, with due diligence
and care, and in the best interests of the company and all shareholders. The Board
should oversee the development of and approve the company’s business objectives
and strategy, and monitor their implementation, in order to sustain the company’s
long-term viability and strength. The Board should review and guide corporate
strategy, major plans of action, risk management policies and procedures, annual
budgets and business plans; set performance objectives; monitor implementation
and corporate performance; and oversee major capital expenditures, acquisitions
and divestitures. Sound strategic policies and objectives translate to the company’s
proper identification and prioritization of its goals and guidance on how best to
achieve them. This creates optimal value to the corporation.

The Board is primarily responsible for defining the Bank’s vision and mission.
The Board has the fiduciary responsibility to the Bank and all its shareholders
including minority shareholders. It shall approve and oversee the implementation
of strategies to achieve corporate objectives. It shall also approve and oversee
the implementation of the risk governance framework and the systems of checks
and balances. It shall establish a sound corporate governance framework. The
Board shall approve the selection of the Chief Executive Officer (“CEO”) and key
members of senior management and shall likewise oversee the performance of
their functions.

V. Leadership in UNO Digital UNO Digital Bank | 21

D. Description of the role and contribution of executive, non-executive and
independent directors, and of the chairman of the Board

The Chairperson of the Board shall provide leadership in the Board. He shall ensure
effective functioning of the Board, including maintaining a relationship of trust with
members of the Board. He shall, in addition to his functions under Article III, Section
8 of the Bank’s By-Laws:

1. Ensure that the meeting agenda focuses on strategic matters including

discussion on risk appetites, and key governance concerns;
2. Ensure a sound decision‐making process;
3. Encourage and promote critical discussion;
4. Ensure that dissenting views can be expressed and discussed within the
decision‐making process;
5. Ensure that members of the Board receive accurate, timely, and relevant
information;
6. Ensure the conduct of proper orientation for first‐time directors and provide
training opportunities for all directors; and
7. Ensure the conduct of performance evaluation of the Board at least once a year.

An independent director is one who is independent of management and free from

business or other relationship which could, or could reasonably be perceived to,
materially interfere with his exercise of independent judgment in carrying out his
responsibilities as director and must possess all the qualifications and none of the
disqualifications, as prescribed by the Bangko Sentral ng Pilipinas, Securities and
Exchange Commission, and other regulatory authorities, from time to time.

22 | UNO Digital Bank V. Leadership in UNO Digital

 Board of Directors
Founders
KALIDAS GHOSE
Chairman and Co-founder
• The principal stockholder represented if nominee - UNO Asia Pte. Ltd.
• The number of years served as director – 2 years, 8 months
• Number of direct and indirect shares held – 1 Common A
• Percentage of shares held to total outstanding shares of the bank - 0.00%

MANISH BHAI
Executive Director/CEO and Co-founder
• The principal stockholder represented if nominee - UNO Asia Pte. Ltd.
• The number of years served as director – 2 years, 8 months
• Number of direct and indirect shares held – 1 Common A
• Percentage of shares held to total outstanding shares of the bank - 0.00%

Directors
BENJAMIN CROSS SEVILLA
Director
• The principal stockholder represented if nominee - Digippines Holding Inc.
• The number of years served as director – 2 years, 8 months
• Number of direct and indirect shares held – 1 Common B
• Percentage of shares held to total outstanding shares of the bank - 0.00%

RONALDO MODESTO VENTURA

Director
• The principal stockholder represented if nominee - UNO Digital Holdings Inc.
• The number of years served as director – 2 years, 8 months
• Number of direct and indirect shares held – 1 Common A
• Percentage of shares held to total outstanding shares of the bank - 0.00%

JUAN MIGUEL MAPA

Director
• The principal stockholder represented if nominee - UNO Digital Holdings Inc.
• The number of years served as director – 2 years, 8 months
• Number of direct and indirect shares held – 1 Common A
• Percentage of shares held to total outstanding shares of the bank - 0.00%

V. Leadership in UNO Digital UNO Digital Bank | 23

Independent Directors
MARIA NANCY VALIENTE
Independent Director
• Type of directorship - Independent
• The principal stockholder represented if nominee - N/A
• The number of years served as director - 2 years, 8 months
• Number of direct and indirect shares held – 1 Common A
• Percentage of shares held to total outstanding shares of the bank 0.00%

WILFRIDO ATIENZA
Independent Director
• The principal stockholder represented if nominee - N/A
• The number of years served as director - 2 years, 8 months
• Number of direct and indirect shares held – 1 Common A
• Percentage of shares held to total outstanding shares of the bank 0.00%

GRISELDA GLORIA SANTOS

Independent Director
• The principal stockholder represented if nominee - N/A
• The number of years served as director - 2 years, 8 months
• Number of direct and indirect shares held – 1 Common A
• Percentage of shares held to total outstanding shares of the bank 0.00%

DAVID JOHN BINDER

Independent Director
• The principal stockholder represented if nominee - N/A
• The number of years served as director - 2 years, 8 months
• Number of direct and indirect shares held – 1 Common A
• Percentage of shares held to total outstanding shares of the bank 0.00%

Board Qualification
The Bank is headed by a competent, working board to foster the long-term success of
the corporation, and to sustain its competitiveness and profitability in a manner consistent
with its corporate objectives and the long-term best interests of its shareholders and other
stakeholders.

The Board should be composed of directors with a collective working knowledge,

experience or expertise that is relevant to the Bank’s operations. The Board should always
ensure that it has an appropriate mix of competence and expertise and that its members
remain qualified for their positions individually and collectively, to enable it to fulfill its roles
and responsibilities and respond to the needs of the organization based on the evolving
business environment and strategic direction.

24 | UNO Digital Bank

24 V. Leadership in UNO Digital
 Accessible Leadership in
UNO Digital
UNO Digital’s organizational structure is designed with the highest standards of
leadership and accountability, ensuring accessibility for all. Accessibility to leaders
cultivates a culture of inclusivity among employees, offering employees training and
growth opportunities.

MANISH BHAI
CEO/President

LESTER CRUZ UTKARSH SAXENA LEA PAGADUAN CLARO BONILLA SAIKAT SARKAR
Head of Customer Head of Chief Operations Chief Financial Deputy
Franchise Assets Officer Officer CEO

VIKAS JHA LUIS AFRICA SAMIR KHARE EMS REQUINA VIVIAN PEREZ MICHAEL GATELA
Head of Digital Chief Technology Chief Information OIC, Sr Gen, Chief Risk Head of
Products and Officer Officer Human Resources Officer Collections and
Innovations Credit Operations

SHIENE SANTOS ROMEL MENIADO KAREN ABELLA

Head of Chief Compliance Head of
Marketing Officer Legal

RONALDO AMELIA TEJERO

MENDOZA Head of
Head of Treasury Audit

Reporting to ALCO Reporting to Board Committee Functional Support

*As of June 2024

V. Leadership in UNO Digital UNO Digital Bank | 25

UNO Board-level Committees
1. Executive Committee
Chairperson: Manish Bhai
Members: Kalidas Ghose, Benjamin Cross Sevilla

The Committee may act on such specific matters within the competence of the
Board of Directors so far as may be permitted by applicable laws and by the
Articles of Incorporation and By-Laws of the Corporation, principally in terms of
day-to-day operations, including:

A. The appointment of a new vendor for an activity already authorized by the

Board;
B. The appointment of authorized representatives and signatories to vendors and
other business partners, or to government agencies or local government units;
C. Submission of regulatory reports or requirements.

2. Corporate Governance Committee

Chairperson: Griselda Gay Santos
Members: Wilfrido Atienza, Kalidas Ghose

The CG Committee shall assist the Board in fulfilling its corporate governance
responsibilities. In this regard, the CG Committee shall:

A. Oversee the nomination process for members of the Board and for
positions appointed by the Board.
B. Review and assess the structure, size and composition of the Board,
including the examination and assessment of the effectiveness of
the Board’s selection standards, nomination and recruitment
process of directors.
C. Annually review the independence of the members of the Board.
D. Oversee the continuing education program for the Board.
E. Oversee the design and operation of the remuneration and other
incentives policy.

26 | UNO Digital Bank V. Leadership in UNO Digital

3. Risk Oversight Committee
Chairperson: Wilfrido Atienza
Members: David Binder, Manish Bhai, Kalidas Ghose, Nancy Valiente

The ROC shall advise the Board on the Bank’s overall current and future risk
appetite, oversee senior management’s adherence to the risk appetite statement,
and report on the state of risk culture of the Bank.

4. Information Technology Risk Committee

Chairperson: Kalidas Ghose
Members: Manish Bhai, Juan Miguel Mapa

The IT Risk Committee is a Board Committee that shall oversee and assess
the Corporation’s technology-related strategies, assess risks, and make
recommendations. It shall also oversee the development and implementation of the
Corporation’s cybersecurity policy.

5. Audit Committee
Chairperson: David Binder
Members: Benjamin Cross Sevilla, Griselda Gay Santos

Oversee the financial reporting framework. The committee shall oversee the
financial reporting process, practices, and controls. It shall ensure that the
reporting framework enables the generation and preparation of accurate and
comprehensive information and reports.

Monitor and evaluate the adequacy and effectiveness of the internal control
system. The committee shall oversee the implementation of internal control
policies and activities. It shall also ensure that periodic assessment of the internal
control system is conducted to identify the weaknesses and evaluate its robustness
considering the Bank’s risk profile and strategic direction.

V. Leadership in UNO Digital UNO Digital Bank | 27

6. Human Resources Committee
Chairperson: Nancy Valiente
Member: Kalidas Ghose, Manish Bhai, Ronaldo Ventura

The HR Committee, a vital Board Committee, is entrusted with ensuring adherence

to best practices concerning employees’ compensation, diversity, and talent
development within the organization. This committee plays a pivotal role in
overseeing and implementing policies and strategies aimed at fostering fair and
competitive compensation structures, promoting diversity and inclusion initiatives,
and nurturing talent development programs. By upholding these standards, the
HR Committee contributes significantly to creating a positive work environment,
attracting top talent, and fostering the professional growth and well-being of
employees within the Bank.

7. Related Party Transactions Committee

Chairperson: Nancy Valiente
Member: David Binder, Benjamin Cross Sevilla

The duties and responsibilities of the RPT Committee include:

A. Review policy guidelines and implementing procedures for handling relevant

RPTs by ensuring effective compliance with existing laws, rules and regulations,
and global best practices and recommend such policies as may be appropriate
for the approval of the Board;
B. Evaluate existing relations between and among businesses, clients and
counterparties to ensure that all Related Parties and RPTs are continuously
identified and monitored, including subsequent changes in relationships with
counterparties (from non-related to related and vice versa);
C. Review of material RPTs to ensure that these are conducted in the regular course
of business (fair process) and not undertaken on more favorable economic terms
to such related parties than similar transactions with non-related parties under
similar circumstances (fair terms), and that no corporate or business resources of
the Bank are misappropriated or misapplied;

28 | UNO Digital Bank V. Leadership in UNO Digital

Directors’ Attendance at Board
and Committee Meetings
BOARD MEETING EXECUTIVE COMMITTEE
Director No. of meetings Attended No. of meetings Attended
Kalidas Ghose 5 5 3 3
Manish Bhai 5 5 3 3
Ben Sevilla 5 5 3 3
Ronaldo Ventura 5 4 N/A N/A
Juan Miguel Mapa 5 5 N/A N/A
Freddie Atienza 5 5 N/A N/A
David Binder 5 5 N/A N/A
Nancy Valiente 5 5 N/A N/A
Gay Santos 5 5 N/A N/A
CORP GOV COMMITTEE AUDIT COMMITTEE
Director No. of meetings Attended No. of meetings Attended
Kalidas Ghose 5 4 N/A N/A
Manish Bhai N/A N/A N/A N/A
Ben Sevilla N/A N/A 4 4
Ronaldo Ventura N/A N/A N/A N/A
Juan Miguel Mapa N/A N/A N/A N/A
Freddie Atienza 5 5 N/A N/A
David Binder N/A N/A 4 4
Nancy Valiente N/A N/A N/A N/A
Gay Santos 5 5 4 3
RISK OVERSIGHT COMMITTEE IT RISK COMMITTEE
Director No. of meetings Attended No. of meetings Attended
Kalidas Ghose 9 8 3 3
Manish Bhai 9 9 3 3
Ben Sevilla N/A N/A N/A N/A
Ronaldo Ventura N/A N/A N/A N/A
Juan Miguel Mapa N/A N/A 3 3
Freddie Atienza 9 9 N/A N/A
David Binder 9 8 N/A N/A
Nancy Valiente 9 8 N/A N/A
Gay Santos N/A N/A N/A N/A
RPT COMMITTEE HR COMMITTEE
Director No. of meetings Attended No. of meetings Attended
Kalidas Ghose N/A N/A 3 3
Manish Bhai N/A N/A 3 3
Ben Sevilla 2 2 N/A N/A
Ronaldo Ventura N/A N/A 3 3
Juan Miguel Mapa N/A N/A N/A N/A
Freddie Atienza N/A N/A N/A N/A
David Binder 2 2 N/A N/A
Nancy Valiente 2 2 3 3
Gay Santos N/A N/A N/A N/A

V. Leadership in UNO Digital UNO Digital Bank | 29

Ensuring Performance Excellence
The Bank’s integrated Performance Excellence Program Framework, comprises of
four stages namely Communicate, Engage, Coach, Excel (CE-CE), which is designed
to clarify, coach, assess and reward performance in an objective and fair manner;
to support career development and achievement of business objectives. It will
establish the following:
• Performance appraisals assessed through key performance indicators (KPI’s)
and “be TRUE@UNO” value components to uphold the bank’s Values
• Drive excellence in the performance of the employees as individuals, teams and
functions
• Individual Goal settings aligns with business objectives as agreed between the
manager and the employees
• Engage employees and managers through a regular, ongoing communication
and feedback process
• Performance coaching and improvement plans

The procedure is composed of three (3) phases: Goal setting, Interim/Mid-year

Review and Year- end Review. Goal setting is performed at the start of the year
and/or when a new employee joins the organization. Interim/Mid-year Review is
conducted on specified timeline or before the end of the probation period of the
employee and Year-end Review is completed at the end of the year.
All employees of the Bank shall be formally evaluated semi-annually to provide
feedback. Through course correction, performance recognition, skills development,
and monitoring of objectives, areas of focus for the continuous progression of their
career are identified.

Encouraging Talent Growth

The Bank is committed to providing staff training and development to ensure not
only all the employees are continuously knowledgeable and skilled to carry out
their roles, but also that training and development activities are delivering a benefit
to both the employee and the business. Training programs shall be classified and
developed based on compliance, skills and company-specific needs. The Bank
shall use multiple methodologies and channels which will match the training needs
and the content of the programs. The Bank is committed to ensure equality of
learning opportunities; hence, no employee will be excluded from learning on the
grounds of gender (including gender reassignment ), marital status, family status,
religious belief, disability, age, racial grounds, sexual orientation, etc. Probationary
and regular employees shall have equal access to learning and development
opportunities appropriate to their role and/or learning needs.

30 | UNO Digital Bank V. Leadership in UNO Digital

Empowering the Future
The Succession Management and Talent Development Programme is a dynamic
framework aimed at strategically identifying, assessing, and nurturing talent for
future critical roles, ensuring ongoing organizational excellence. By maintaining a
pool of individuals with the requisite competencies and readiness to step into key
positions as required, the program addresses organizational exigencies effectively.

Oversight is provided by an HR Board Committee comprising senior officers,

responsible for decisions regarding talent nominations and inclusion to succession
plans. The process begins with the identification of key management positions
and proceeds with the nomination of candidates based on performance, potential,
and competencies. Subsequent talent screening involves various assessments and
interviews to evaluate nominees’ readiness. Those qualifying are recommended for
inclusion in the Executive Talent Pool, subject approval by the CEO.

To support talent development, Individual Development Plans are crafted,

encompassing on-the-job training, interactive programs, and classroom sessions.
Progress is regularly reviewed, and engagement strategies are deployed to sustain
performance and commitment. The process continues until talents are placed in
key positions within the organization, ensuring a seamless transition and sustained
organizational effectiveness.

V. Leadership in UNO Digital UNO Digital Bank | 31

Engaging Talent through Merit-
based Reward Strategy
UNO is committed to fostering a high-performance culture that attracts,
motivates, and retains top talent. To achieve this goal, the bank maintains a
robust Remuneration Policy designed to appropriately compensate directors
and officers for exceptional performance. This policy aligns with UNO’s efforts to
recruit and develop the best talent through competitive recruitment practices and
ongoing learning initiatives. The Remuneration Policy encompasses a sustainable
compensation structure and benefits program tailored for directors and officers,
ensuring competitiveness within the industry. It includes provisions for basic
compensation, incentives, recognition, and rewards for individuals who meet
performance targets and objectives, thereby incentivizing excellence and driving
organizational success.

The implementation of the remuneration policy provides framework for the design
of the rewards program across the bank to ensure that business and people
strategies are appropriately aligned with our compensation, benefits, and rewards
approach as approved by the board.

To ensure high employee morale and its alignment to drive business objectives the
key pillars of the remuneration policy are:

• Compliance with regulatory requirements and principles of employee code of

conduct.
• Structure to drive sustainable performance, by maintaining consistency between
remuneration and performance, and between rewards and value creation.
• Clear and transparent organizational governance structures and role goal clarity.
• Motivation and retention of employees
• Continuous monitoring of market trends and practices, aimed to ensure

32 | UNO Digital Bank V. Leadership in UNO Digital

UNO Related Party Transactions
Framework
I. Overarching policies and procedures for managing related party
transactions

The Board of Directors, Management and Staff of UNObank and its affiliates commit
themselves to adopt and adhere with the Policy Guidelines on Related Party Transactions
(RPT). These guidelines were formulated in accordance with the requirements of the Revised
Corporation Code, the Securities Regulation Code and its implementing rules, the Revised
Code of Corporate Governance and other circulars issued by the Securities and Exchange
Commission (“SEC”), Bangko Sentral ng Pilipinas (“BSP”) Guidelines in Strengthening
Corporate Governance on RPT of Banks, BSP Guidelines on RPT, Prudential Policy on Loans
to directors, officers, stockholders, and their related interests (“DOSRI”)/ Subsidiaries/Affiliates,
Basel Core Principles (“BCP”) for Effective Banking Supervision and other related laws and
regulations. These guidelines shall be updated regularly to adopt new issuances by relevant
regulatory agencies and/or new applicable rules and regulations.

The Bank recognizes that engaging in RPTs has economic benefits to the parties involved
and to the entire UNObank Group. RPTs are generally allowed provided that these are done
on an arm’s length basis. RPTs are monitored and appropriate steps must be taken to control
or mitigate the risks. As such, RPTs shall be conducted in the regular course of business (fair
process) and not undertaken on more favorable economic terms to such related parties than
similar transactions with non-related parties under similar circumstances (fair terms).

V. Leadership in UNO Digital UNO Digital Bank | 33

The Board of Directors, through the RPT Committee, exercises appropriate oversight in the
implementation of the control systems for managing RPT exposures and ensures that RPTs
are handled in accordance with the policies set out in this Manual. The RC shall be apprised,
on an ongoing basis, of any regulatory governance requirements or updates relating to related
party transactions.

The materiality threshold of RPT/s, either individually or in aggregate over a twelve (12) month
period with the same related party, amounting to ten percent (10%) or higher of the Bank’s
total assets based on its latest audited financial statement, shall be considered material RPTs.

II. Conglomerate Structure

UNOASIA Pte. Ltd. UNO Digital Holdings, Inc Digippines Holding Inc.
(Singaporean) (Filipino) (Filipino)
Voting Voting Voting
40% 39% 21%

UNObank Inc.

34 | UNO Digital Bank V. Leadership in UNO Digital

UNO Self-Assessment Function
Internal Audit
The internal audit function of the Bank is responsible for providing independent,
objective assurance and consulting services designed to add value and improve
the Bank’s operations. The internal audit activity helps the Bank accomplish its
objectives by bringing a systematic, disciplined approach to evaluate and improve
the effectiveness of governance, risk management and control processes. The
internal audit function maintains its organizational independence by reporting
functionally to the Board of the Directors, through the Audit Committee, and
administratively to the President/Chief Executive Officer.

The internal audit function has established policies and procedures, approved by
the Board, to guide the internal audit activity, and to comply with sound internal
audit standards, such as the Institute of Internal Auditors’ (IIA) International
Standards for the Professional Practice of Internal Auditing (ISPPIA) and other
supplemental standards and best practices issued by international organizations/
regulatory authorities/government agencies, as well as the Code of Ethics for
the profession. The internal audit function has also developed its risk-based
internal audit work plan to determine the priorities of audit for 2023 based on the
documented annual risk assessment, which takes into consideration the inputs of
the Board and Senior Management.

To effectively carry out the approved IA work plan and to fulfill its mandate, the
Board of Directors authorizes the internal audit function to:

A. Have full, free, and unrestricted access to all functions, records, property, and
personnel pertinent to carrying out any engagement, subject to accountability
for confidentiality and safeguarding of records and information.
B. Allocate resources, set frequencies, select subjects, determine scopes of work,
apply techniques required to accomplish audit objectives, and issue reports.
C. Obtain assistance from the necessary personnel of the Bank, as well as other
specialized services from within or outside the Bank, in order to complete the
engagement.

V. Leadership in UNO Digital UNO Digital Bank | 35

Compliance
The Compliance Department is headed by the Chief Compliance Officer (CCO)
vested with the role of designing the Bank’s Compliance Program and overseeing
and coordinating its effective implementation towards the sound management
of business and compliance risks. The CCO directly supervises the Compliance
Officers in managing compliance risk areas of anti-money laundering, regulatory,
and compliance testing, as well as data privacy. Compliance Department also
coordinates with the Senior Management Team/Heads of Departments to
propagate the right compliance culture across the organization.

The Compliance Department is independent from the business activities of the

Bank. It carries out its responsibilities on its own initiative in all units where
business and compliance risks exist and shall be provided with sufficient resources
to carry out its responsibilities effectively. The Compliance Department is free to
report to Senior Management and the Board of Directors through the Corporate
Governance Committee, any irregularity or breach of laws, regulations, code of
conduct, standards of good governance, etc., without fear of retaliation or disfavor
from management and/or other affected parties.

36 | UNO Digital Bank V. Leadership in UNO Digital

UNO Corporate Social
Responsibility Initiatives

In alignment with our commitment to customers and communities, UNO has

outlined several key initiatives for the upcoming year. Firstly, we will prioritize
strategic succession planning to ensure the continuity of our business operations.
Additionally, we are dedicated to supporting businesses and initiatives that
promote economic growth, environmental protection, social development, and
nation-building.

To further our sustainability efforts, we will actively raise awareness about

sustainability and our sustainability objectives through various communication
channels. Moreover, we will focus on promoting financial wellness by offering
tailor-fit and sustainable products and services to our customers. As part of our
commitment to social inclusion and gender equality, we will provide gender-
sensitive financial solutions and support initiatives that enhance social inclusion
and gender equality.

In 2023, we expanded our efforts to promote financial literacy by integrating

campus education and extending workshops to nearby working-class individuals.
Through these workshops, both students and blue-collar workers were empowered
to explore the full financial cycle, ultimately aiming to improve their livelihoods.

VI. Corporate Social Responsibility UNO Digital Bank | 37

UNO Consumer Protection
Practices
UNObank, Inc. Consumer Protection Program is in line with the Bangko Sentral
ng Pilipinas (“BSP”) Regulations on Financial Consumer Protection Circular 1048
as amended by Circular 1160, “The Financial Consumer Protection Framework”.
The Consumer Protection Program of UNObank is consistent with the BSP policy
to provide for an enabling environment that protects the interests of financial
consumers and institutionalizes the responsibilities of stakeholders of the Bank.
This program ensures that UNObank is responsive to the needs of their customers
and stakeholders while being held to against a high standard of accountability.

The Executive Management is responsible in approving and overseeing the

implementation of UNObank Inc. Consumer Protection Program as well as the
mechanism to ensure compliance with the said program. The ExeCom is also
responsible for monitoring the performance of the Philippine Management Team in
managing the day to day consumer protection activities of UNObank.

The UNObank Management Team is responsible for the implementation of

UNObank Consumer Protection Program, its Consumer Assistance Process and
Complaint Handling Process for consumers. The Management Team is comprised
of business heads and support function heads such as Product, Digital, Operations,
Technology, Risk, Legal, Compliance and Finance Heads. A dedicated Quality
and Customer Experience Lead or the Consumer Assistance Officer with support
from the Human Channels Head is responsible for the adequate performance
of the consumer assistance process, who oversees and manages the customer
satisfaction metrics and service level of the customer service operations. The
Quality and Customer Experience Lead ensures that complaints are recorded,
tracked, analyzed and resolved. The QCE Lead also ensures that the root cause
is identified and preventive measures are provided to avoid recurrence. The
QCE Lead reports to the Management Team the findings of this analysis and
recommendations, and escalates immediately significant complaints affecting
the Bank’s compliance to the financial consumer protection. Customer Happiness
Specialists (CSS) are responsible for handling direct contact with clients, and
ensuring the resolution of a client query, request, complaint or feedback through
appropriate channels in a timely manner.

38 | UNO Digital Bank VII. Consumer Protection

UNObank’s Customer Assistance Management System (CAMS) allows the
Bank to effectively monitor, measure and control consumer protection risks
inherent in its operating model and its operations. The CAMS is implemented to
ensure UNObank’s adherence to consumer protection standards of conduct and
compliance with consumer protection laws, rules and regulations thus ensuring
identified risks to UNObank and risks of financial harm to customers are addressed
or prevented.

The Bank’s Customer Happiness team allows financial consumers1 to provide

feedback, inquiry concerns, and complaints 24 hours through the following
channels:

• UNObank Phone banking Support upon launch, UNObank Customer Support

Specialists are available to assist customers.

• UNObank Mobile-In-App Message upon launch, for longer and secure messages,
customers may opt to send it via the authenticated in-app message.

• UNObank Mobile-In-App Chat after public launch, our Cutomer Support

Specialists are online 24/7 to assist customers.

• UNObank Viber and Whatsapp Messaging as additional channels post-

introduction to the public and upon readiness, customers may opt in to send it
via Viber App and Whatsapp App for any inquiries or feedback.

VII. Consumer Protection UNO Digital Bank | 39

UNO Information on Sustainable
Finance
A. Sustainability strategic objectives and risk appetite;
The Bank’s sustainability strategy has the following objectives:
• Doing business responsibly for UNObank is based on the belief that as the Bank
grows in terms of profitability, it also needs to grow responsibly
• Conduct business responsibly so that it enhances operational performance,
even while preserving the natural environment, conforming with best-in-class
corporate governance, positively improving the lives of communities in which it
operates and caring for development and well-being of its employees
• Optimize lifecycle engagement of the Bank’s customers by providing them
with simpler, better, accessible banking, through a single trusted interface to
manage one’s entire financial life cycle journey with speed and ease: a platform
where customers can save, borrow, transact, invest and protect in a simple and
transparent manner
• Provide services digitally, to make the products available to more people at a
lower cost without sacrificing quality and security, and support the financial
inclusion objective of BSP and the Government
• Integrate environmental and social risks into its internal risk management
frameworks
• Continuous evaluation and application of international environmental and social
standards within the Philippine business environment
• Assess implications of incidents that can lead to negative environmental and
social outcomes which can result into business continuity risk, reputation risk,
and a direct financial impact

B. Overview of E&S risk management system;

The Bank’s E&S risk management system is governed through the ESG Policy that
was adopted by the Board on 29th April 2023. Within the limited scope of E&S
contribution for a digital consumer bank, the policy provides for the following:

• Exclusion list comprising of sectors/professions which the Bank will not engage
in any financial activity, especially lending and investment.
• Project categorization for non-individual lending aiming to avoid financing and
lending activities to projects where utilization of proceeds is expected to have
significant adverse environmental and social risks and /or impacts are diverse,
irreversible, or unprecedented

40 | UNO Digital Bank VIII. Sustainability

• Ensuring financial inclusion and financial literacy through liabilities products,
lending products and investments (as applicable)
• Management of the bank’s own E&S footprint
• Provision for products that have a positive climate action impact (e.g. credit/
debit cards out of recycled plastics)
• Ensuring an employment environment that promotes E&S including diversity,
skills enhancement, non-discrimination, etc.
• Mapping of UNObank’s contributions against the 17 Sustainable Development
Goals

The operationalization of the E&S Risk governance is achieved through the

establishment of a multi-functional ESG Focused Group (ESGFG), comprising of
the Chief Risk Officer (CRO), Chief People Officer (CPO), Chief Compliance Officer
(CCO), Chief Finance Officer (CFO), Data Protection Officer (DPO), Chief Operations
Officer (COO), Regulatory Compliance Head, and Enterprise Risk Management
Head, Product Team nominee.

This ESGFG will report to two Board level committees – the Corporate Governance
Committee and The Risk Oversight Committee (ROC) – for the purpose of approval
of the implementation of ESG standards in the Bank and for assessing and
approving risks associated with the ESG standards, if any.

The ESGFG is currently headed by the CRO who will be responsible for guiding the
group to engage with the frontline Business Units to design policies and procedures
aligned to the Bank’s ESG goals.

Furthermore, UNObank is committed to gender equality in the workplace with 53%

of the employees being women (IMPROVE GRAPH)

Male Female
47% 53%

VIII. Sustainability UNO Digital Bank | 41

Below table shows UNObank’s compliance to United Nation’s Sustainable
Development Goals.

Notes:
1. Currently UNObank is following a hybrid work strategy - where employees are required to work from site for two
days a week.
2. UNOBank’s head office is in a LEED Certified building, which helps UNO contribute towards environmental
sustainability. Also, in line with regulation for digital banks, UNObank does not have branches in the Philippines.
3. All digital product offering, and digital operations. Minimal to no paper in day-to-day functioning other than those
required from a legal perspective. This supports climate action. Also facilitates financial inclusion since anyone with
a mobile phone, internet connection, and valid ID can access the financial system using UNObank’s products
4. Approx 71% of UNObank’s liabilities accounts are from outside Metro Manila. Approx 53% of UNObank’s customers
are women, facilitating financial inclusion and gender equality
5. Workforce gender distribution includes 53% women. UNObank has been active in promoting gender equality
6. MSME sector focus. With support from Digital Pilipinas and Proxterra, UNObank has initiated financial education
and literacy for MSME entities, with certificates from Monetary Authority of Singapore at the end of the session.
7. UNObank has participated in the head office Building admin’s CSR activity for Bayani Foundation scholars for about
15 students. The session included education on financial literacy including phases of financial growth and its cycle -
earning, savings, investments and donations
8. UNObank’s interns from APC have been onboarded with UNO savings accounts. These interns are being oriented in
managing financial apps and management of finances
9. Ergonomics - UNObank has a distribution of ergonomic tables, which can help employees raise tables at the press of
a button. With sitting being considered as the new smoking, facilitation of a healthy work environment is a key UNO
goal.
10. While women are majority in UNO’s workforce, UNO has also made provisions to ensure good healthy work
environment for its women employees, with private rest areas, refrigerators for milk storage, and has already
implemented a maternity policy
11. Strong corporate governance standards to ensure a well-managed financial institution that can support the
Philippines economy and population on a sustained basis. An ESG policy has also been published. The ESG Focused
Group has also been initiated, which meets quarterly to develop, assess, and implement products and processes to
support sustainability.
12. New Product initiatives are in the pipeline - e.g. physical cards (debit or credit ) to be made of recycled materials. We
are evaluating other retail banking solutions like tool to measure carbon footprint of retail transactions, etc. As the
bank stabilizes and operations become more robust, we expect to introduce such innovations in the future

42 | UNO Digital Bank VIII. Sustainability

C. Breakdown of E&S risk exposures of the bank per industry or sector;

Sixty-four percent (64%) of the customers that have availed of loans are employed
in the private sector, 29% of which are from the IT/BPO/Business Services and 10%
from Retail/Wholesale. Being a credit-led financial institution, it is the Bank’s thrust
to provide credit products suited for the mass and mass affluent segment. 49% of
existing customers have income greater than or equal to PHP300,000.00.

Loans to customers with small businesses (sari-sari stores) has also been initiated
to provide financial assistance for business expansion.

D. Information on existing and emerging E&S risks and their impact on the
bank; and

Currently the Bank is mainly focused on providing financial service solutions to

individual retail customers. Accordingly, the E&S risks are insignificant. The Bank
provides access to financial products and hence facilitates financial inclusion
through its various products, for the mass and mass affluent segment of customers.
While the bank currently does not engage in non-individual lending, it has already
adopted the ESG Policy, that already provides for assessment of partners / clients
in the event that such a corporate deal is to be implemented. In the absence of such
engagements, we assess the current E&S Risk of the bank to be negligible.

VIII. Sustainability UNO Digital Bank | 43

UNO Risk Exposure and
Assessments
UNOBank currently complies with all necessary regulatory risk reporting
requirements.

The Bank is also in the process of establishing comprehensive internal risk

monitoring and reporting solutions, as it scales up its loans portfolio. In phases, the
bank is implementing risk leading indicators (risk profiles of borrowers), followed
by risk coincident indicators (credit performance) and risk lagging indicators (losses
and recoveries). Credit performance data is currently being collated for future
development of custom scorecards as well as benchmarks which will enable the
bank to scale the lending portfolio prudently. The Bank is also monitoring its PD,
EAD, and LGDs, to have adequate assessment of Lifetime Expected Credit Loss for
the portfolio and build adequate provisions for the lending portfolio.

Reconciliation between the Philippine Financial Reporting Standards (PFRS) Capital

and capital under Philippine Regulatory Principles including Qualified Capital for
Minimum Adequacy under Basel II are as follows;
IN MILLION

2023 2022

PFRS Capital 1,469.85 1,212.49

Differences due to Accounting Principles (28.67) 6.06

FRP Capital 1,441.18 1,218.56

General loan loss provision 20.19 0.02

Capital adjustments (698.45) (217.65)

Qualified Capital for Minimum Adequacy 762.91 1,000.93

Compliance under Basel II

Per CAR Submitted to BSP 762.91 1,000.93

2023 2022
Risk-Weighted Capital Risk-Weighted Capital
Assets Requirement Assets Requirement

Credit Risk-Weighted Assets 1.769 Billion 177 Million 437 Million 44 Million

Market Risk-Weighted Assets 125 Million 13 Million 91 Million 8 Million

Operational Risk-Weighted Assets 213 Million 21 Million - -

44 | UNO Digital Bank IX. Risk Exposure and Assessment

UNO Credit Risk
The lending activities undertaken by the Bank entail exposure to credit and
concentration risks, as well as susceptibility to fluctuations in business cycles. In
order to mitigate these risks, each lending segment adheres to specific underwriting
parameters that consider factors. The overarching goal of credit risk management
is to uphold a portfolio of high-quality loans that are both profitable and align with
standards for sustainable risk assessment.

Type of Exposure Total Credit Risk Exposure (Outstanding Balance) Risk Assessment
Personal Loan PHP644,695,148.25 New
Salary Loan PHP20,858,729.03 Low Risk
MSME PHP64,676.36 New

*As of December 31, 2023

UNO Market Risk

Given that the Bank has not yet started its trading activity, its market risk occurs
mainly in currency exchange transactions. In adherence to Section 99 of MORFXT,
which stipulates that a bank’s consolidated net open foreign exchange position
should not surpass 25% of its qualifying capital or USD 150.0 million, whichever is
less, the Bank conducts daily monitoring of its position vis-à-vis this threshold.

IX. Risk Exposure and Assessment UNO Digital Bank | 45

UNO Operational Risk
UNObank’s operations consist of day-to-day routines and activities that enable
the Bank to achieve its business objectives. The Bank has organized its operations
through processes that are designed to promote efficiency and to mitigate potential
errors. The Bank acknowledges that no organization can completely avoid errors
and mistakes, though well-defined and robust processes support the Bank’s
internal control framework, reduces potential for losses, and also helps to mitigate
impact on our reputation.

On a high level, the Bank’s risk universe consists of financial and non-financial risks.
Non-financial risks are due to inadequate internal processes, people and systems or
external events. Thus, errors in the Bank’s operations typically fall under the non-
financial category. These risks are managed using specific tools, methodologies and
procedures across all units and functions in the Bank. UNObank is willing to accept
limited exposure to non-financial risk as part of its operations and is defined in its
Operational Risk KRIs. Appropriate and economically viable mitigating measures
are implemented to control these risks through these KRIs, along with strong
internal controls.

The operations of the Bank are heavily reliant on reliable IT services, information
security, data management and skilled resources. IT services undergo continuous
updating and development to provide a high-quality service in an evolving
environment. Continuity of operations is a key consideration. Business continuity
capabilities are critical to the continued success of the Bank. Security of confidential
client, business and employee information is of utmost importance to the Bank.
Additionally, critical business functions require high levels of integrity and
availability of IT systems and data. Hence, we have established an automated
process of transfer of data to an internal data warehouse and strive towards
automation of reporting (internal/external/regulatory) to the maximum extent
possible.

The Bank also monitors the adequacy of models used to mitigate risks arising
from decision making based on inadequate or incorrectly implemented models.
Model tracking is done as part of the Operations Risk Management Framework.
In line with the above, the Operational Risk KRIs are established for the following
key areas: System Downtime, Outsourcing Risk, Operational Losses, Business
Continuity, Risk Control Self-Assessment (RCSA), Model Risk Management and
Human Resources.

46 | UNO Digital Bank IX. Risk Exposure and Assessment

UNO Interest Rate in the Banking
Book
For interest rate risk on banking book (IRRBB), the Bank measures the impact of
interest rate increases on Net Interest Income (NII) over a 12-month period and will
soon be looking at Economic Value of Equity.

In the meantime, pending validation of the IRRBB model/system, the Bank continues
to use the Earnings-at-Risk methodology to monitor monthly the impact on
earnings resulting from fluctuations in interest rates. This allows the Bank to assess
the potential exposure of its earnings to changes in interest rate levels, enabling
proactive management of interest rate risk. By employing this methodology, the
Bank can better anticipate and mitigate the effects of interest rate movements on
its profitability, thereby enhancing its overall financial resilience and stability.

IX. Risk Exposure and Assessment UNO Digital Bank | 47

 Audited Financial
Statements (AFS) with
Auditor’s Opinion
X. Audited Financial Statements UNO Digital Bank | 49
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