PCC OKs sale of SB Finance stake to Thai bank

Security Bank got the approval of the country’s antitrust body to sell half of its holdings in one of its subsidiaries to Thailand’s fifth largest bank, statements from the company and the competition watchdog said on Thursday.

The Philippine Competition Commission (PCC) said it had cleared the purchase by Thailand’s Bank of Ayudhya Public Ltd. of 50 percent of the outstanding capital stock of SB Finance Company Inc., the consumer finance subsidiary of Security Bank.

“The PCC Mergers and Acquisitions Office found the transaction unlikely to lead to substantial lessening of competition in provision of unsecured personal loans nationwide,” the PCC said in a statement. Security Bank also said this in a brief disclosure to the stock market on Thursday.

Posttransaction, Bank of Ayudhya will own 50 percent of SB Finance while Security Bank will retain a 49.54-percent interest, the PCC said. It said it had approved the deal because there were other competitors in the market. And given the limited market share of the merged entity, the PCC said the parties behind the transaction would have no incentive to raise interest rates and decrease the quality of services unilaterally.

The ultimate parent entity of Bank of Ayudhya is Mitsubishi UFJ Financial Group Inc. (MUFG), a Japanese group with extensive banking portfolio.

MUFG’s presence in the Philippines is through MUFG Bank Ltd. and Acom Consumer Finance Corp., MUFG’s consumer loan arm.

The acquired entity, SB Finance, is a domestic corporation engaged in financing and leasing through extension of facilities to mass market consumers, and specializing in unsecured personal loans.

In the meantime, the PCC said companies were still required to notify the PCC about their merger and acquisition under current thresholds, that is if the value of assets or revenue of the acquired entity is at least P2.4 billion.