Security Bank sells 20% to Japanese financial group

Security Bank Corporation has sold a 20 percent equity stake to the Bank of Tokyo-Mitsubishi UFJ Ltd. (BTMU), the commercial banking entity of Mitsubishi UFJ Financial Group (MUFG).

With a transaction value of P36.943 billion or $782 million, BTMU acquired a total of 150,707,778 common shares priced at P242 apiece and 200,000,000 preferred shares priced at P0.10 apiece. This accounts for a 20-percent stake in Security Bank.

The deal was forged for more than 12 months in order to iron out any kinks the cross-cultural transaction might encounter in the future.
 
“This one took more than a year. It’s not only equity we’re looking at. We’re looking at collaboration areas, the DNA. Do you like these people, do you like how they do business, are they the type of people we can work with?” Alfonso L. Salcedo Jr., Security Bank president and CEO said at the sidelines of a press briefing in Makati City.
 
“This partnership is something we are very excited about, ushering in a new era for the bank moving forward. This will enhance shareholder value and help accelerate plans and execute what we want to execute faster,” he said.
 
The deal is expected to raise some P36.9 billion in capital for Security Bank, increasing shareholder capital to P89.3 billion from the P52.4 billion as of September 2015, the company said in a separate statement.
 
“The agreement is 100-percent collaboration,” Go Watanabe, BTMU managing executive officer and CEO for Asia &Oceania, said.
 
With the 20-percent stakeholder shares, Watanabe said that the Japanese firm is “very confident at this level.”
 
“Security Bank is the only partner for BTMU. There is no plan in the future to look for other partners. For now Security Bank is the only partner,” he said.
 
“We believe and understand the Philippines is one of the potential markets in Asia... I think this country is very prominent in potential countries,” he added.

Growth and e-commerce
 
With the capital increase stemming from the partnership, Security Bank said it will now focus on its expansion plans and e-commerce.
 
“Within the next five years, we see a 500 to 600 branch range. It will be organic, but we are open to acquiring when the opportunity presents itself,” Salcedo said.
 
Security Bank said it will also seize the opportunity to share information and technology with its new partner.
 
“E-commerce has always been a strategy for us. We have been trying to improve the platform in the last couple of years. The plan has always been to expand branch network and compliment it with e-commerce. Hopefully, we do some tech and success transfer sooner than later,” Salcedo said.

BTMU said it is willing to work hand-in-hand with Security Bank.
 
“We have a BTMU subsidiary which specializes in mobile banking... We are willing to support and transfer our experience in Japan,” Watanabe said.

Security Bank Vice President Ropi Dangazo earlier filed for a voluntary trading halt on the bank's shares at the Philippine Stock Exchange.
 
"We will do a significant transaction disclosure," the regulatory filing read.
The trading halt started at 9:22 a.m. Thursday.

The trading halt was eventually lifted at 11:30 a.m. after the press briefing.

Security Bank is the 8th largest private domestic universal bank in the country, with total assets of P385 billion, and the 7th largest in loans with a loan portfolio of P173 billion, according to the bank's previous filings.
 
“We will be number 5 behind PNB (Philippine National Bank) with the capital expansion,” Salcedo said. – VS, GMA News