Security Bank, Krungsri to infuse P3 billion in capital into SB Finance
SECURITY BANK CORP. and Thailand-based Bank of Ayudhya Public Co. Ltd. (Krungsri) are set to infuse P3 billion in fresh capital into their consumer finance subsidiary SB Finance, Inc. for its expansion.
Security Bank told the local bourse on Tuesday that the two banks have obtained internal approvals to infuse the additional capital as SB Finance gears up to expand its business and invest in digital technology.
SB Finance will issue 25,850,000 common shares that will be subscribed to on a 50:50 basis by Security Bank and Krungsri once they get approvals from regulators, it said.
Krungsri currently owns a 50% stake in SB Finance, Security Bank’s consumer finance unit, which it bought in October 2020 at P1.53 billion.
SB Finance President and Chief Executive Officer (CEO) Abigail Marie D. Casanova said the bank will use the proceeds to further expand its business as it plans to launch new products and invest in the latest cloud-based technology aiming to boost end-to-end customer service.
“As we anticipate the recovery of the economy and the resurgence of pent-up demand in the consumer finance segment, the additional capital will be used for business expansion as we are set to launch multiple products this year starting with Car-4-Cash, a proven successful loan product offering of Krungsri in Thailand,” Ms. Casanova was quoted as saying.
The unit will also use the funds to improve its “internal capabilities” to support its growing operations.
“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,” Security Bank President and CEO Sanjiv Vohra said in the same statement.
SB Finance is planning to expand its loan portfolio and product offerings, the statement said.
“The partnership will make a customer-centric, digital lending experience available to all Filipinos and small business owners, while building on Krungsri’s expertise as the number one consumer finance provider in Thailand,” it added.
Krungsri is the fifth-largest bank in Thailand based on assets, loans, and deposits. It also has a regional network of 698 branches, including those in Laos, Myanmar, and Cambodia.
Its parent entity is Japan’s Mitsubishi UFJ Financial Group, Inc. In the Philippines, Mitsubishi UFJ runs MUFG Bank, Ltd. and Acom Consumer Finance Corp., which offers unsecured personal loans.
Meanwhile, Security Bank is the eighth biggest domestic universal bank in the Philippines with total assets of P650.8 billion as of September 2020.
It posted a net income of P1 billion in the third quarter of 2020, down 63% from P2.7 billion in the prior year amid higher provisioning for loan losses due to the coronavirus pandemic. This brought its nine-month net profit to P6.7 billion, down 13% year on year.
Security Bank shares went up by 0.7% or 90 centavos to close at P129.90 apiece on Tuesday. — Beatrice M. Laforga