Security Bank, MUFG partnership is credit positive

MANILA, Philippines — The strengthened partnership between Security Bank Corp. and Tokyo-based MUFG Bank Ltd. is credit positive for the listed bank in the Philippines, according to Moody’s Investors Service.

The debt watcher said the expanded partnership between the two banks would encourage increased business flow and help Security Bank broaden its corporate client base to MUFG’s customers.

Moody’s also said the cash management initiative with MUFG would increase Security Bank’s low-cost corporate deposits, thereby reducing its funding costs.

Furthermore, the international credit rater said Security Bank could also benefit from fee income through ancillary services such as overseas transfers and settlements.

“Furthermore, the partnership also provides opportunities for Security Bank to expand its client base for cross-selling to MUFG’s corporate clients,’ Moody’s said.

On March 18, Security Bank signed a cash management partnership agreement with Japan’s largest bank. The partnership will provide MUFG clients with products and services that are suited to the local market while complementing its current product offerings through Security Bank’s DigiBanker platform.

Security Bank president and chief executive officer Sanjiv Vohra earlier said MUFG’s corporate clients now have access to the full range of the cash management portfolio of Security Bank.

“Our partnership is an incredible opportunity for us to take the best of Security Bank and MUFG and raise the bar for financial service excellence in the region,” Vohra said.

MUFG spent P37 billion to acquire a 20 percent stake in Security Bank way bank in 2016 as both banks have leveraged on their combined networks and capabilities to collaborate on various initiatives.

Recently, Thailand’s Bank of Ayudhya or Krungsri spent over P1.5 billion to purchase a 50 percent interest in Security Bank’s consumer lending arm SB Finance Corp.

Security Bank is the 10th largest lender in the country in terms of assets with P653.4 billion, based on data from the Bangko Sentral ng Pilipinas (BSP). It has 313 branches and 787 ATMs nationwide.