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Bank of Ayudhya partners Security Bank to tap Philippine consumer finance market

Thailand’s Bank of Ayudhya (Krungsri) is set to join Security Bank to infuse $62 million in fresh capital for the expansion of its consumer finance subsidiary, SB Finance.

March 04, 2021 | Janine Marie Crisanto
  • SB Finance will issue 25,850,000 common shares which will be subscribed on a 50:50 basis by Security Bank and Krungsri
  • SB Finance will allocate the additional capital for technology and business expansion
  • The COVID-19 pandemic has impacted the bank’s asset quality and muted its retail loan expansion

Security Bank and Bank of Ayudhya (Krungsri), Thailand’s fifth largest financial group, received internal approvals for the $62 million (PHP 3 billion) capital injection to SB Finance. SB Finance is set to issue 25,850,000 common shares which will be equally subscribed by Security Bank and Krungsri. After announcing the partnership between the two banks in August 2019, Krungsri officially acquired 50% stake in SB Finance in October 2020.

Security Bank and Krungsri have Japan’s MUFG Bank as a common shareholder. MUFG Bank acquired a 20% stake in Security Bank in 2016, providing its global expertise which helped the local bank scale up its retail franchise.

Sanjiv Vohra, president and CEO of Security Bank, shared, “This additional capital infusion further cements Security Bank’s strategic partnership with Krungsri to help rebuild consumer confidence and foster financial inclusion”. Security Bank has been building and strengthening its retail banking business since its transformation in 2012. The bank has grown its market share in consumer lending from 1% in 2012 to 6% in 2019.

Leveraging Security Bank’s unsecured personal loan portfolio and expertise of Krungsri as one of the leading consumer finance players in Thailand, SB Finance is planning to expand its loan portfolio and offer a digital lending experience to individuals and small business owners. Security Bank has been growing its consumer lending over the years. As of third quarter of 2020 (Q3 2020), its consumer loan portfolio already contributes 26% of the bank’s total loan portfolio, which is a significant increase from the 5% co...

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Keywords:Bank Partnership