Security Bank Corp. is set to strengthen its foothold in the consumer finance sector through a strategic acquisition, purchasing a 25% ownership interest in Home Credit Philippines (HCPH) from MUFG Bank Ltd. for approximately P11 billion.
The deal, which is subject to regulatory approvals, is expected to be finalized by the first quarter of 2025.
With this acquisition, Security Bank will enhance its position in the fast-growing e-payments and consumer finance markets, aligning with its broader strategy to boost financial inclusion and provide innovative loan options.
The deal also deepens Security Bank’s relationship with key strategic partners, Krungsri and MUFG Bank, both of whom already have stakes in Home Credit Philippines.
Home Credit Philippines, a leading consumer finance company, is majority-owned by Krungsri, which holds a 75% stake through its parent company, Bank of Ayudhya PCL. Despite Security Bank’s new acquisition, Krungsri will remain the dominant shareholder, continuing to oversee operations in the Philippines.
Sanjiv Vohra, president and CEO of Security Bank, expressed enthusiasm about the acquisition’s potential. “We are thrilled by the strategic advantages this acquisition offers as we welcome Home Credit into the Security Bank family,” he said. “This is a fantastic chance to enhance financial inclusion, provide creative loan options, and take advantage of synergies. Together, we’re excited to propel growth and deliver value to our stakeholders.”
The acquisition builds on the longstanding relationship between Security Bank and MUFG Bank, which dates back to 2016, and also deepens its collaboration with Krungsri. The companies’ joint venture with SB Finance Inc. — a key player in the Philippine consumer finance market — further strengthens their combined market presence.
Security Bank broadens its reach in digital payments
Through this move, Security Bank aims to broaden its reach in the growing digital payment and financing sector, where consumers increasingly turn to alternative financial services to meet their credit needs.
The Philippines has seen a surge in demand for e-payments and digital finance solutions, and Home Credit’s established presence and strong brand recognition in the consumer finance space offer a valuable avenue for expansion.
MUFG’s Yasushi Itagaki, Chief Operating Officer of International Operations, expressed confidence in the partnership. “We are happy to enter into this agreement with Security Bank, as we believe that Security Bank will complement Krungsri in Home Credit Philippines. Home Credit will continue to grow thanks to Security Bank’s local market knowledge and on-the-ground presence,” he said.
The deal is expected to help the bank accelerate its growth in the consumer finance and e-payments sectors, which are expected to be key drivers of future profitability.
Eduardo Olbes, the bank’s Chief Financial Officer, highlighted the bank’s goal of improving its return on equity by 2025, with plans to nearly double its current eight percent to double-digit figures. This acquisition is seen as a crucial step in achieving these financial targets.
A unique opportunity to tap into a growing market
Home Credit Philippines’ strong presence in the digital payments and personal financing space presents Security Bank with a unique opportunity to tap into a growing market. By leveraging Home Credit’s platform, the bank plans to expand its reach to unbanked and underbanked Filipinos, providing them with access to credit and financial services through a user-friendly digital interface.
The acquisition also aligns with Security Bank’s broader goal of becoming the Philippines’ most customer-focused bank. The bank has previously invested in strengthening its digital capabilities and enhancing its customer service, and the addition of Home Credit Philippines to its portfolio is a key part of this strategy.
Earlier this year, Security Bank also announced a robust 12% growth in net income, reaching ₱8.55 billion for the first nine months of 2024, which is a notable increase from the ₱4.83 billion net income it posted during the same period last year.
The deal represents a significant shift in the competitive landscape of the Philippine banking and financial services industry. As digital payments and consumer finance continue to evolve, the partnership between Security Bank and Home Credit Philippines is expected to contribute to the ongoing transformation of the sector, bringing innovative financial products to a broader population.
As the transaction moves toward completion, market watchers are keen to see how Security Bank will leverage its new stake in Home Credit Philippines to drive growth and extend its reach in the ever-expanding e-payments market.