Security Bank Corp. is expecting the newly-sealed strategic partnership with a Thai bank to boost its financial inclusion initiatives amid the coronavirus pandemic.
In a statement on Tuesday, the listed bank announced it finalized the partnership deal with Bank of Ayudhya, which is commonly known as Krungsri.
This, after the Philippine Competition Commission approved Krungsri’s acquisition of a 50-percent stake in SB Finance Co. Inc. (SBF), Security Bank’s consumer finance subsidiary. The listed bank inked a deal with the Thai bank last year involving the sale of SBF stake.
Security Bank’s shares climbed by 1.17 percent, or P1.10, to settle at P95.10 apiece amid the 1.55-percent uptick for the benchmark index on Tuesday.
The partnership is aimed at making customer-centric digital lending experience available to clients and small business owners.
Security Bank President and CEO Sanjiv Vohra welcomed the agreement, noting this came at a “very opportune time.”
“This strategic partnership with Bank of Ayudhya will help rebuild consumer confidence and enhance financial inclusion at this time of the Covid-19 pandemic,” he said. “We are confident that by leveraging on Krungsri’s strength in the ASEAN retail finance market and in consumer risk management, we can contribute meaningfully to the economic recovery of the Philippines.”
The deal is also seen resulting in SBF growing its loan portfolio and loan products being offered to clients. Both the Security Bank’s strength in unsecured personal loan segment and Bank of Ayudhya’s expertise in the Asean retail finance market are expected to aid the consumer finance product offering and service of SBF.
ING Bank N.V. was tapped as the financial advisor of this transaction.
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. The bank said its total revenues 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.
The bank said 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.