SBF 50% stake-sale gets PCC approval

SECURITY Bank Corp. announced on Thursday that the sale of 50-percent stake in its consumer finance subsidiary to a Thai bank was approved by the competition authority.

The listed bank said in a disclosure that the Philippine Competition Commission greenlighted the acquisition of half of the ownership in SB Finance Company Inc. (SBF) by Bank of Ayudhya Public Company Ltd., commonly known as Krungsri.

“The PCC finds that the proposed transaction will not likely result in substantial lessening of competition,” Security Bank said.

Security Bank saw its shares slide on Thursday by P2.25, or 2.39 percent, to settle at P91.70 each amid the 0.80-percent decline for the main index. Its value turnover reached P57.48 million for the day.

In August last year, Security Bank disclosed that it sealed a strategic partnership with the Thai bank which involved the sale of SBF stake after securing regulatory approvals.

The deal is seen resulting in SBF growing its loan portfolio and loan products being offered to its clients.

“Both the Security Bank’s strength in unsecured personal loan segment and Bank of Ayudhya’s expertise in the Asean [Association of Southeast Asian Nations] retail finance market are expected to aid the consumer finance product offering and service of SBF,” a statement said.

In his earlier statement, Security Bank President Sanjiv Vohra said the partnership was aimed at expanding the retail offerings of the bank.

“By localizing the strategies that propelled Krungsri to become Thailand’s market leader in consumer finance, SBF is well positioned to scale the business faster, launch better and more innovative product variants, serve more customers and, in effect, substantially grow its market share in retail business,” Vohra explained.

Security Bank saw its first half earnings climb by 14 percent to P5.7 billion from P5 billion last year for the same period on the back of higher net interest income and trading gains. Total revenues, meanwhile, surged by 68 percent to P25.9 billion while total net interest income rose by 34 percent to P15.8 billion in the first six months.

It earmarked P11-billion worth of buffer for potential credit losses, which is markedly higher than P639 million last year. Gross nonperforming loan ratio stood at 1.58 percent while NPL coverage ratio was at 174 percent.