Security Bank, Thailand’s Krungsri complete deal

Lender Security Bank Corp. has completed a deal to sell 50 percent of its consumer finance unit, SB Finance (SBF) Co., to Bank of Ayudhya, forming what is expected to become a formidable consumer banking partnership with Thailand’s fifth largest financial group.

Bank of Ayudha, commonly known as Krungsri, is a member of the Mitsubishi UFJ Financial Group (MUFG) network, which is also a strategic investor in Security Bank.

“The closing of this transaction comes 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. 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,” Security Bank president and chief executive officer Sanjiv Vohra said in a press statement on Tuesday.

The partnership deal with Krungsri, first announced in August last year, was consummated after the parties obtained all the necessary regulatory approvals in the Philippines and Thailand.

With this partnership in the consumer finance business, these banking groups aim to make a “customer-centric” digital lending experience available to all Filipinos and small business owners. This is also seen to strengthen the relationship between the two institutions which both have MUFG as a common shareholder.

MUFG, Japan’s largest banking group, completed in 2016 a P36.9-billion fresh capital infusion into Security Bank in exchange for a 20 percent stake, forming what was touted as a “game-changing” partnership that will alter the local banking landscape in the years ahead.

SB Finance, for its part, is expected to grow its loan portfolio and loan products suite, building on Security Bank’s track record in the country’s unsecured personal loan segment.

The partnership is set to offer various loan products that cater to personal and small business needs of the Filipino market, while building on Krungsri’s expertise as the No. 1 consumer finance provider in Thailand.

Krungsri and Security Bank appointed ING Bank N.V. as financial advisor on this transaction. INQ