1

Proving core business potency in the new landscape

2

New Realities, New Chemistry

Primacy of strong

customer relationshi

ps

Return to core

banking practices

Emphasis on leaner

cost structure

s

Prominence of risk culture

Focus on competiti

ve advantag

e

Competition for

deposits

3

UnionBank’s long-term strategic imperatives

Resilient strategy

framework

Re-energized brand

Risk-adjusted returns

Robust resource base

Resurgent loan & securities

•Solid profitability through improved recurrent income•Healthy interest margins•Asset quality preservation•Customer franchise expansion

•Commitment to exceptional customer satisfaction and loyalty

•Brand values of expertise, relevance, and challenging convention

•Adherence to governance principles of transparency and sound risk management

•Disciplined approach to pricing risk factors in support of a more aggressive lending posture

•Acceleration in deposit base through improved sales management and product development systems

•Excellence in service quality and leading edge in innovation

•Emphasis on more sustainable revenue sources through expansion in loans & securities

•Broadening market reach with strong bias for reputable and high-growth industries

4

2,068

2,978

2007 2008

3,013

3,824

2007 2008

Net income position in 2008 suppressed by reduced gains from capital markets

2008 Performance: Stability in tumultuous times

31%

Net income(in million pesos)

Non-interest income(in million pesos)

1,382

307

2007 2008

21%

Net trading gains(in million pesos)

78%

5

5.13.6

3.5

2.4

2007 2008

Loans Securities

Interest income(in billion pesos)

Increasing dominance of recurrent earnings provided buffer versus sharp market volatilities

2008 Performance: Stability in tumultuous times

+46%

+40%

6

4,831

5,875

2007 2008

Net interest income(in million pesos)

2008 Performance: Stability in tumultuous times

-389

656

1.0 BChange in interest income & expense

(in million pesos)

Interest income Interest expense

1.0 B

Net interest position boosted by the twin-strategy of higher interest income & reduced interest expense

7

Net interest margin

Margin improvement endured even in challenging market conditions

%4.1

3.3

3.7

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

2006 2007 2008

2008 Performance: Stability in tumultuous times

8

5,246

5,120

2007 2008

Efficiency gains helped decrease operating expenses even with greater transaction volumes

2008 Performance: Stability in tumultuous times

2%

Operating expenses(in million pesos)

9

106.8

161.4

2007 2008

51%

Unyielding surge in deposit base a testament to UnionBank’s sustainable growth

2008 Performance: Stability in tumultuous times

Outstanding deposits(in billion pesos)

10

60

179

224

161

107

116

5446

4228

24

143115

927359

47

3830

24

2000 2002 2004 2006 2008 2010

Actual FOCUS 2010 target

Smart Banking led to deposit growth ahead of FOCUS 2010 program

2008 Performance: Stability in tumultuous times

Superior sales management system

Robust product management process

Excellence in service quality & efficiency

10-year CAGRUBP = 26.4%Industry = 7.8%**based on Sept 2008 BSP data

Outstanding deposits(in billion pesos)

Constant quest for innovation

11

2.2 2.84.0 5.0

5.0

27.7

4.6

42.8

2007 2008

Credit Card Mortgage Auto Loans Corporate &Commercial

55.6

38.5

+55%

+9%

+25%+27%

+44%

2008 Performance: Stability in tumultuous times

Strong expansion in loan portfolio supported by both consumer and non-consumer market segments

Loan breakdown(net of allowance & bills purchased, in billion pesos)

10-year CAGRUBP = 18.1%Industry = 3.8%**based on Sept 2008 BSP data

Quality loan growth anchored on prudence & risk consciousness

Preservation of healthy loan spreads

Inclination towards industries of known strength & resilience

12

1.95

0.96

1.85

4.16%3.93%

1.49%

2006 2007 2008

Net NPL (in billion pesos) Net NPL ratio

2008 Performance: Stability in tumultuous times

Strong credit quality maintained through sound risk management practices

Net non-performing loans*

*NPLs net of reserves; Loans net of IBCL

13

GENERAL OUTLOOK

Cautious optimism on the macroeconomy & overall financial

system

Higher interest rates late in the year on deficit spending &

offshore funding

Steady credit volumes & increasing margins

Diminishing volatility with emerging opportunities for trading

gains

SPOTTING OPPORTUNITIES

Shape of business portfolio

Operating and governance models

Strategy for establishing competitive advantage

Approach to talent management

2009 Strategic thrust: Investing for the upturn