Security Bank acquires 25% of Home Credit

Security Bank Corp. is intensifying its investments in the consumer space, one of its main revenue growth drivers, after buying an P11-billion stake in HC Consumer Finance Philippines Inc.

In a stock exchange filing on Friday, the bank led by tycoon Frederick Dy said it had entered into an agreement with Japan’s MUFG Bank Ltd. to purchase the latter’s 25-percent stake in the operator of Home Credit Philippines.

Thailand-based Krungsri (Bank of Ayudhya PCL and its business units) will continue to be Home Credit’s majority shareholder with a 75-percent stake, Security Bank said.

“This is a tremendous opportunity to leverage synergies, offer innovative lending solutions and support financial inclusion,” Security Bank president Sanjiv Vohra said in a disclosure.

Home Credit is a consumer financing firm with over 11 million customers in the Philippines. Its products include cash loans, revolving credit, insurance and warranty service.

For their part, Home Credit said the acquisition would “bring forth continued growth” for the company by leveraging Security Bank’s on-the-ground presence and understanding of the local market.

In the January to September period, Security Bank’s net loans climbed by 24 percent on sustained growth in home loans and credit cards.

The retail segment, which includes consumer loans, accounted for around 29 percent of Security Bank’s total loan portfolio, according to chief finance officer Eduardo Olbes.

This comes amid Security Bank’s aggressive technology investment plan meant to help modernize the system of the country’s eighth-largest bank.

Earlier, Security Bank chief operating officer Lucose Eralil said all their branches were equipped with Mosaic Voyager, a new tellering and lobby management system that speeds up transactions and manages branch lobby traffic.

Its new payment hub likewise provides streamlined operations and reduced transaction times to improve customer experience.

Growth in ’25

Security Bank is also expecting to continue riding its growth momentum into next year as it anticipates returns from investments and expansion plans.

Olbes told reporters on Thursday they were eyeing a “near double-digit” or up to a 9-percent return on equity in 2025, especially if revenue growth continues to accelerate.

Return on equity measures a company’s profitability by revealing how much profit it generates with the money shareholders have invested.

“Revenues have to grow as fast as they’re doing now or better,” Olbes said during a media chat. “We expect to improve in terms of cost-to-income ratios, which means more of the revenues will hit the bottom line.”

In the first nine months of the year, Security Bank’s return on equity ended at 8 percent. Net income jumped by 12 percent to P8.5 billion as easing interest rates boosted its loan portfolio.

Revenues surged by 28 percent to P40 billion.

Security Bank also plans to open at least 50 more branches next year to grow its network to 400 and move in step with large corporations that are expanding to the provinces. The bank currently has 328 branches.

“We feel we’re underrepresented … Many commercial hubs are growing and, therefore, we need to establish a presence [in the provinces],” Olbes said. INQ