SECURITY Bank Corporation (PSE: SECB) announced recently its strategic partnership with Thailand’s Bank of Ayudhya (SET: BAY), commonly known as Krungsri.
Upon closing of the transaction after all regulatory approvals are obtained, Krungsri or its subsidiaries will acquire a 50% stake in SB Finance Company, Inc. (SBF), SBC’s consumer finance subsidiary.
The partnership will see the two banks working together to provide top-notch consumer finance products to more Filipinos. The joint venture strengthens the relationship between the two institutions which have MUFG Bank, Ltd. as a common shareholder.
SBF is expected to grow its loan portfolio and loan products suite as the collaboration builds on the strengths of Security Bank in the country’s unsecured personal loan segment, while leveraging on Krungsri’s expertise in the ASEAN retail finance market, being the number one consumer finance provider in Thailand, with presence in Laos, Cambodia, and Myanmar.
Security Bank President & CEO Sanjiv Vohra said, “SBC and Krungsri are both committed to accelerating customer-centricity in banking. 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.”
He added that the newly formed alliance is part of SBC’s aggressive strategy to expand its retail offerings. The integration will also allow SBF to adopt more sophisticated risk management models and incorporate more process efficiencies in its operations. “This joint venture is just one of several projects in our pipeline. We plan to rollout more significant initiatives in the future as we further our goal to enhance our customers’ experience and strengthen our position in the consumer retail market,” added Mr. Vohra. The two banks plan to jointly explore opportunities in personal loans, motorcycle loans, and insurance.
Krungsri President & CEO Seiichiro Akita said, “We are very pleased to partner with a leading financial institution like Security Bank. Together, the two banks will join hands in developing and delivering quality consumer finance products to people in the Philippines. With expertise and experiences from both sides, the collaboration between Krungsri and SBC will enhance SBF’s business competitiveness while penetrating and serving the Philippines’ high growth consumer finance market.”
Krungsri and Security Bank appointed ING Bank N.V. as financial advisor on this transaction.