Security Bank seals sale of stake in financing arm

MANILA, Philippines — Security Bank Corp. has completed the sale of its 50 percent stake in its consumer finance subsidiary to Thailand’s Bank of Ayudhya Public Co. Ltd., commonly known as Krungsri.

Sanjiv Vohra, president and chief executive officer at Security Bank, said the closing of the transaction involving the entry of Krungsri in SB Finance Co. Inc. comes at a very opportune time particularly with the strong presence of the Thai firm in member countries of the Association of Southeast Asian Nations (ASEAN).

Vohra said the strategic partnership with Bank of Ayudhya would help rebuild consumer confidence and enhance financial inclusion amid the COVID-19 pandemic.

“We are confident that by leveraging on Krungsri’s strength in the ASEAN retail finance market and in consumer risk management, we can contribute meaningfully to the economic recovery of the Philippines,” Vohra said.

SB Finance is expected 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.

The partnership is set to offer various loan products that cater to personal and small business needs of the Filipino market, while building on Krungsri’s expertise as the number one consumer finance provider in Thailand.

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.

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

In 2016, MUFG Bank bought a 20 percent stake in Security Bank allowing the local bank to access MUFG’s global expertise and grow its business beyond local borders.

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 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 challenging economic environment due to the global health crisis.