Thailand’s Krungsri to acquire 50% of Security Bank’s consumer finance subsidiary

Security Bank and Thailand's Ayudha Bank have agreed to the latter's acquiring a significant stake in the former's consumer finance subsidiary. Photo: Security Bank

Security Bank Corporation on Thursday said it has entered into a partnership with Thailand’s Bank of Ayudhya (Krungsri) for the latter to acquire a significant stake in the local lender’s consumer finance subsidiary.

In an emailed statement on Thursday evening, Security Bank said Krungsri is set acquire 50% of SB Finance Company Inc., pending regulatory approval.

While details of the transaction have yet to be disclosed, Security Bank said ING Bank N.V. has been tapped as the financial advisor.

Under the partnership, the two banks are set to provide consumer finance products to more Filipinos, which will strengthen the relationship between the two institutions with MUFG Bank, Ltd. as a common shareholder.

Security Bank said it expects SBF to grow its loan portfolio and loan products suite in the country’s unsecured personal loan segment, while leveraging on Krungsri’s expertise in the ASEAN retail finance market.

According to Security Bank, Krungsri is the number one consumer finance provider in Thailand, with presence in Laos, Cambodia and Myanmar.

“By localizing the strategies that propelled Krungsri to become Thailand’s market leader in consumer finance, SBF is well-positioned to scale the business faster, launch better and more innovative product variants, serve more customers and, in effect, substantially grow its market share in retail business,” said Security Bank president and CEO Sanjiv Vohra.

The integration will also allow SBF to adopt more sophisticated risk management models and incorporate more process efficiencies in its operations.

“This joint venture is just one of several projects in our pipeline. We plan to roll out more significant initiatives in the future as we further our goal to enhance our customers’ experience and strengthen our position in the consumer retail market,” said Vohra.

“With expertise and experiences from both sides, the collaboration between Krungsri and SBC will enhance SBF's business competitiveness while penetrating and serving the Philippines' high-growth consumer finance market,” said Krungsri president and CEO Seiichiro Akita. — Jon Viktor D. Cabuenas/BM, GMA News