PCC clears sale of 50% stake in Security Bank’s consumer finance unit

MANILA, Philippines — The Philippine Competition Commission (PCC) has given Security Bank Corp. the green light to enter into a strategic partnership with Thailand’s Bank of Ayudhya for its consumer finance subsidiary.

In a disclosure to the Philippine Stock Exchange (PSE), Security Bank said it received the approval of the PCC for the sale of its 50 percent stake in SB Finance Co. Inc (SBF) to Bank of Ayudhya, commonly known as Krungsri.

“The PCC finds that the proposed transaction will not likely result in substantial lessening of competition,” the bank said.

In August last year, Security Bank entered into a strategic partnership with Krungsri to build on their strengths in the unsecured personal loan segment by jointly exploring opportunities in other areas including credit cards, auto loans, motorcycle loans and insurance.

Security Bank president and chief executive officer Sanjiv Vohra and Krungsri president and CEO Seiichiro Akita inked the strategic partnership agreement.

“Security Bank and Krungsri are both committed to accelerating customer-centricity in banking. By localizing the strategies that propelled Krungsri to become Thailand’s market leader in consumer finance, SBF is well positioned to scale the business faster, launch better and more innovative product variants, serve more customers and, in effect, substantially grow its market share in retail business,” Vohra said during the signing of the agreement.

Under the tie up, both banks vowed to work together to provide top-notch consumer finance products to more Filipinos.

The joint venture strengthens the relationship between the two institutions that have Mitsubishi UFG Bank Ltd. as a common shareholder.

SBF expects to grow its loan portfolio and loan products suite as the collaboration builds on the strengths of Security Bank in the country’s unsecured personal loan segment, while leveraging on Krungsri’s expertise in the ASEAN retail finance market, being the number one consumer finance provider in Thailand, with presence in Laos, Cambodia and Myanmar.

The newly formed alliance is part of Security Bank’s aggressive strategy to expand its retail offerings and allow SBF to adopt more sophisticated risk management models and incorporate more process efficiencies in its operations.

Earnings of Security Bank went up by 14 percent to P5.7 billion from January to June compared to P4.95 billion in the same period last year despite a sharp jump in provision for credit losses due to the impact of the   COVID-19 pandemic.

The bank earmarked P11 billion as provision for possible soured loans in the first half, 17 times the P639 million allocated in the same period last year in anticipation of a challenging economic environment due to the pandemic.