Security Bank open to mergers, acquisitions

MANILA, Philippines - Security Bank Corp. is open to possible mergers and acquisitions after successfully taking in the Bank of Tokyo – Mitsubishi UFJ Ltd. (BTMU) as foreign strategic partner.

Security Bank president and chief executive officer Alfonso Salcedo Jr. said the bank is always on the lookout for opportunities in the country’s competitive banking industry.

“When it’s there we have to look at how much you are paying and what you are getting. We are looking but let us see,” Salcedo said.

BTMU, the largest bank in Japan, pumped in P37 billion in fresh equity in April last year making it the second largest shareholder in Security Bank with 20 percent next to the family of businessman Frederick Dy.

Salcedo explained the bank needs to use the capital infused by its Japanese partner.

“BTMU introduced to us different clients so I think the process by which we cross sell to the BTMU customers is ongoing. We are optimistic that it will be a good contributor to our business,” he said.

The bank expects to sustain a double-digit growth in earnings this year.

Security Bank profit grew 11 percent to P8.55 billion last year from P7.75 billion in 2015. The bank’s net interest income increased 28 percent to P15.9 billion, wiping out the P1.1-billion drop in trading gains to P1.8 billion last year.

Salcedo explained the global financial markets remain volatile as the US Federal Reserve jacked up benchmark rates by 25 basis points last December and hinted at the possibility of another rate increase this year.

The bank’s total loans and investments in corporate bonds increased 25 percent to P317 billion last year while corporate, commercial and retail customer loans increased 20 percent to P289 billion.

The Bangko Sentral ng Pilipinas (BSP) is offering perks to players that take part in the consolidation of Philippine banks to further enhance the competitiveness of the industry.

The BSP has been promoting mergers, consolidations and acquisitions of majority or all of the outstanding shares of stock of a bank or quasi bank to strengthen the financial capabilities and enhance the overall competitiveness of the industry.

Possible incentives include revaluation of premises, improvement and equipment as well as staggered booking of unbooked valuation reserves over a maximum period of five years.