SBC considering bid for UCPB stake

Security Bank Corp. is interested in more merger and acquisition (M&A) opportunities and may bid for the controlling stake in United Coconut Planters Bank (UCPB) that the government is expected to place on the auction block by 2015.

SBC, one of the few banks that have defied an industry-wide downturn in earnings this year, is also upbeat on its profit trajectory for the last two quarters of this year.

“We’re still very bullish for the third quarter and fourth quarter. I think our core businesses are delivering above expectations. Our wholesale bank, composed of corporate banking and commercial banking, is delivering its targets,” SBC president Alberto Villarosa said in an interview with the Inquirer last week.

“Overall, on the core business side, we are very happy with 2014, although there will still be room for improvement,” he said.

The loan portfolio of SBC, the country’s eighth largest private domestic universal bank, will likely grow this year by 15 to 20 percent, he said.

While most of its peers reported a contraction in net profit in the first semester due to the absence of large trading gains seen in early 2013, Security Bank more than doubled its first semester net profit year-on-year to P3.61 billion.

On UCPB, Villarosa said the bank had yet to see the implementing guidelines but that it was interested in joining the bidding.

“We’re interested in looking at these institutions with a rich client base, rich meaning good client base,” he said.

Villarosa added: “[UCPB has] a very good and loyal customer base. It is well worth looking at aside from the branches. We will take a look at it. We’re interested in acquiring customer base.”

Other banks that had indicated interest in bidding for the controlling stake in UCPB are Banco de Oro Unibank, Union Bank of the Philippines, East West Bank, Philippine National Bank and Philippine Bank of Communications.

Meanwhile, Security Bank has completed a capital build-up program that brought its capital adequacy ratio to risk assets to 17-18 percent under the Basel 3 framework.

Basel 3 introduced a complex package of reforms designed to improve the ability of banks to absorb losses. This also extended the coverage of financial risks and required a stronger firewall against stress.

SBC’s focus, Villarosa said, would be to build up its customer base. The bank is aggressively expanding its retail banking footprint.

It was earlier reported that the bank was set to enter the bancassurance business in partnership with a multinational insurance firm as part of its strategy to build up its retail banking presence. A partnership announcement is expected “in a week or so.”

Bancassurance refers to the cross-selling of insurance products in bank branches, a new area of growth for banks’ fee-based earnings.

In the Philippines, a bank has to own at least 5 percent of a company whose insurance products it will sell. Doris C. Dumlao