Security Bank divesting assets in real estates

Security Bank Corp. expects to raise P1.6 billion after it decided to exit its real estate business to focus on its core banking business.

Alfonso Salcedo Jr., president and chief executive officer of Security Bank, said the bank decided to divest its 51.81 percent stake in Security Land Corp. to focus on its core business.

“The decision to sell our stake in Security Land was made for us to focus on the three pillars of our business: wholesale banking, financial markets, and retail banking,” Salcedo said.

The listed bank is selling 10.105 million shares in Security Land at P158.33 per share. Buyers include Keyland Corp., Adelantado Corp., and Blue Sphere Properties Inc.

“We expect to close the transaction before the end of 2015,” Salcedo said.

Security Land was incorporated in July 1995 together with a Singaporean company and a local partner primarily to engage in the acquisition and holding for investment of real estate.

In a separate disclosure to the Philippine Stock Exchange (PSE), Security Bank senior vice president Melissa Aquino said the bank needs to deliver the proof pf payment of any stockholders’ advances made by Security Land to the seller as well as pertinent corporate records to the buyers.

Aquino said proceeds of the sale would be used to beef up Security Bank’s liquidity.

Earnings of Security Bank Corp. slipped a little over five percent in the first nine months due to lower trading gains.

Security Bank booked a net income of P6.1 billion from January to September, P330 million lower compared to P6.43 billion in the same period last year.

Despite the decline, Salcedo earlier said the bank is on track in meeting its income target for this year.

“We are on track versus our profit target for the year. Our core revenues are growing at a healthy rate and are poised to make up for lower trading gains when interest rates rise,” he said.

The listed bank expects to exceed its earnings last year. Security Bank’s profits jumped 43 percent to P7.2 billion last year from P5 billion in 2013.

As of end September, Security Bank has 260 branches and 543 ATMs.