FOLLOWING the capital infusion from Japan’s biggest banking group, Security Bank Corp. is optimistic of continued profitability this year, even as it also focuses on investment in the retail market.
Together with the Bank of Tokyo-Mitsubishi UFJ Ltd. (BTMU), Security Bank reported a 34-percent increase in assets in 2015 totaling P532 billion and net income of P7.7 billion that translated to a 15.2-percent return on shareholders’ equity. This resulted to the lender’s elevation to the fifth-largest private universal domestic bank in the country, from eighth-largest in 2014.
Early this month the two parties sealed a P36.9-billion transaction, securing BTMU a 20-percent stake in the listed bank, making them the second-largest shareholder, after the group of Frederick Dy. It was also the largest equity deal involving a foreign investor in a Philippine financial institution. The Dy group will remain the biggest shareholder, with the majority voting control.
“The Philippines is a good prospect for Japan, and the Japanese companies [have] a growing presence in this market. This will be good for Japan and other Asean countries, and I think the Philippines is very promising,” said Takayoshi Futae, newly appointed board director.
In 2015 over 200 Japanese companies in China expressed interest in migrating to the Philippines due to the then-economic slowdown of the second-largest economy in the world.
Joining Futae is Takahiro Onishi, who heads the Alliance Segment as executive vice president. Security Bank President Alfonso Salcedo Jr. said Onishi will ensure the volume growth and quality of business collaboration with BTMU and other Mitsubishi UFJ Financial Group companies, local and international. The BTMU is the commercial banking arm of one of the world’s largest financial groups with an extensive global network, the Mitsubishi UFG Financial Group.
Due to the drop in trading gains the past years, Salcedo said they expect trading gains to decline. The diminution has forced the bank to engage further in the retail-banking business.
“The intent really is to be able grow Security Bank’s sustainable core revenues and the retail-banking business at full bloom will provide that stability over time. I think this is really…. It’s not the only strategy but I would say that it would make a lot of sense for us to work on our core revenue streams and offset the decline in our trading gains,” Salcedo said.
Security Bank’s priority areas this year centers on the five export processing zones, which are the areas its Japanese clients are closely looking at.
Security Bank also announced the establishment of a new branch in Carmelray Industrial Park II, an industrial redevelopment zone in Calamba, Laguna, which will be the first of several branches to be located in export-processing zones. Salcedo explained this will allow Security Bank to cater to Japanese locators.
The bank looks to set up 500 to 600 branches in the country by 2020 aimed at the retail- and middle-income markets. About two-thirds of the new branches were to be raised in provincial areas, while the remaining one-third will be in Metro Manila. Security Bank aims to establish a minimum of 20 new branches this year, adding to the 266 outlets it already have.
Image credits: Nonie Reyes