BTMU seals P36.9B Security Bank buy-in deal

JAPAN’S largest banking group Bank of Tokyo-Mitsubishi UFJ Ltd. (BTMU) has completed a P36.9-billion fresh capital infusion to Security Bank in exchange for a 20 percent stake in the local bank, sealing what is seen as a “game-changing” partnership that will alter the local banking landscape in the years ahead.

In return for the capital investment, Security Bank has issued to BTMU 150.71 million common shares and 200 million preferred shares, making the Japanese group its second largest shareholder of Security Bank, the bank disclosed to the Philippine Stock Exchange on Friday.

The group of Frederick Dy remains as the biggest shareholder of Security Bank with majority voting control.

In a special board meeting of Security Bank, BTMU’s nominees Takayoshi Futae and Takahiro Onishi were elected to the board of directors. Futae is the managing executive officer in charge of Japanese corporate credit of BTMU based in Tokyo while Onishi is deputy general manager for global corporate banking of BTMU in Japan.

“We welcome BTMU’s representatives to the Security Bank Board. We are happy to share with our customers and stakeholders the good news that our partnership deal with BTMU has been completed today. With our bigger capital and the combined strengths of Security Bank and BTMU, we look forward to serving our customers better than before,” said Security Bank chair Alberto Villarosa.

Go Watanabe, chief executive officer for BTMU Asia and Oceania, said that the strategic alliance with Security Bank was very much aligned with the bank’s expansion plan in Asia. “We are very excited with the opportunity to work closely with Security Bank. We have started exploring various areas for collaboration including work-site business and PPP (public-private partnership) projects. By partnering with Security Bank, we can expect to expand our business platform and identify new business areas for BTMU in the Philippines,” he said.

With BTMU’s 20 percent equity investment, Security Bank’s shareholder capital increased to P90.2 billion pro-forma as of April 1 from P53.2 billion as of end-2015. Security Bank’s book value per share increased by 36 percent to P119.53 pro-forma as of April 1 from P88.17 as of end-2015. This puts Security Bank among the five largest private domestic universal banks in the country by capital.

The additional capital will be used to accelerate the execution of Security Bank’s growth strategies.

“We will be able to more effectively deliver our service-oriented ‘BetterBanking’ brand to our customers through a larger branch network and a more comprehensive range of financial services. We hope to accelerate growth of our retail banking business as well as better coverage of the SME (small and medium enterprise) sector. With BTMU’s expertise in project finance, we expect to participate more actively in PPP and infrastructure projects. Additionally, in partnership with BTMU, Security Bank will be able to penetrate the Japanese business community,” said Security Bank president Alfonso Salcedo Jr.