Security Bank injects additional P750 million in leasing, financing unit

MANILA, Philippines — Listed Security Bank Corp. has infused P750 million in its leasing and finance joint venture with Thailand’s Bank of Ayudhya (Krungsri) as it anticipates pent up demand from the consumer finance segment.

In a disclosure to the Philippine Stock Exchange (PSE), Security Bank said the amount was remitted to SB Finance Company Inc. – a 50-50 joint venture between the listed bank and Krungsri – last May 21.

Security Bank paid P250 million as subscription to 425,000 common shares of SB Finance and another P500 million for the required subscription pursuant to requirements under the Revised Corporation Code with regards to an additional 25 million shares which will be issued by SB Finance from an increased in its authorized capital stock subject to regulatory approval.

The bank said the increase in capital of SB Finance would be used to support its business expansion as it heeds the call of the Bangko Sentral ng Pilipinas (BSP) for financial inclusion.

Furthermore, the amount will be used to fund investment in the company’s technology infrastructure to support the end-to-end customer journey and SB Finance’s digital transformation.

“This is Security Bank’s commitment to support the recovery of the Philippine economy particularly in the consumer finance segment amid these challenging times,” the bank said in the disclosure.

Security Bank and Krungsri sealed their partnership on October last year as the Thai bank acquired a 50 percent stake in SB Finance for P1.53 billion.

Both parties have committed to infuse P3 billion to subscribe 25.85 million common shares to be issued by SB Finance.

Security Bank president and chief executive officer Sanjiv Vohra earlier said the capital infusion of both Security Bank and Krungsri into SB Finance is an expression of support in the recovery of the Philippine economy.

“This move shows that SB Finance is ready to help foster economic growth as businesses begin to recover from the effects of the pandemic.  This additional capital infusion further cements Security Bank’s strategic partnership with Krungsri to help rebuild consumer confidence and foster financial inclusion,” Vohra said.

Abigail Casanova, president and CEO at SB Finance, said the additional capital would be used for business expansion wit the anticipated recovery of the economy from the impact of the COVID-19 pandemic.