East West Banking Corp. (EastWest) has received the regulatory green light for the operation of wholly owned leasing and finance subsidiary, East West Leasing & Finance Corp. (East West Leasing).
The Securities and Exchange Commission (SEC) approved on Wednesday the registration and incorporation of its franchise as the lender’s leasing arm.
“Our mandate is to develop the leasing business and portfolio, thereby creating synergies with the different business units of EastWest Bank and the Filinvest Group,” said Armando Inabangan Jr., president of EastWest Leasing, in a regulatory filing.
The lender said its leasing unit is set to open within weeks, complementing the core lending activities of EastWest Bank, contribute to the bank’s growth and further diversify its income sources.
In July this year, the Bangko Sentral ng Pilipinas (BSP) approved EastWest Bank’s equity investment into EastWest Leasing of P100 million, reflecting 10 times the minimum regulatory requirement.
“We have completed the major regulatory approvals and are now applying for the requisite local business permits and licenses to start commercial operations. EastWest Leasing is most likely weeks away from providing alternative financing packages to the SME and corporate clients of East West,” Inabangan said.
EastWest Leasing will offer competitively packaged financial, both direct and sale-and-lease back, as well as operating leases, factoring, amortized commercial loans and other financing products and services.
The leasing company will initially focus on the lender’s existing clients and simultaneously partner with various vendors and sellers of equipment and machinery.
According to Inabangan, the generic strategy of the top players in the leasing sector is cost leadership. As the newest entrant in the market, EastWest Leasing will focus on value and customer service.
“The competition within the sector is basically based on pricing or low interest rates. Thus, we will not compete directly in terms of pricing. We will exert efforts to compete based on value creation and better customer service,” he said.
In its inaugural year of operation, Inabangan said his team will work toward heightening market awareness of EastWest Leasing and develop and harness business partnerships with the major vendors/distributors of machinery and equipment.
“The challenge is to penetrate the market, establish market recall and be noticed by competitors, aside from creating value for our customers and for the stakeholders. Being a wholly owned subsidiary of EastWest Bank, we shall take advantage of the established business channels, market base, and the expertise of its management and board of directors,” the executive said.