Bangko Sentral ng Pilipinas approved the sale of Security Bank Corp.’s 20-percent stake to Bank of Tokyo-Mitsubishi UFJ Ltd., the largest investment by a foreign financial institution in the Philippines.
The acquisition of 20 percent of Security Bank was valued at P37 billion, or $782 million.
“Please be informed that Security Bank has received the approval of the Bangko Sentral ng Pilipinas on the 20-percent investment of The Bank of Tokyo-Mitsubishi UFJ LTd. in Security Bank Corp.,” Security Bank said in a disclosure to the stock exchange Monday.
Under the strategic partnership agreement signed in January this year, BTMU will acquire newly-issued primary shares of Security Bank consisting of 150,707,778 common shares at P245 per share and 200,000,000 preferred shares at P0.10 apiece, or for a total investment of P36.9 billion.
The Dy family, the bank’s majority shareholders, would retain control over the bank. The additional capital infusion from BTMU would be largely allocated to pursue the bank’s growth and strategies.
Security Bank officials said earlier the transaction was expected to be completed in the first half of 2016, subject to regulatory approval.
BTMU expects to expand its business platform indirectly through the investment in Security Bank, which is known for its retail and SME business capabilities that are new business areas for BTMU in the Philippines.
The infusion will increase Security Bank’s shareholder capital from P52.4 billion as of September 2015 to P89.3 billion on a pro-forma post transaction basis.
Security Bank can also leverage on substantial partnership synergies by tapping BTMU’s extensive relationship with the Japanese corporate and its global network and diverse range of
functions and expertise with the MUFG group.
With the capital infusion, Security Bank is now looking at expanding its nationwide coverage by putting up a significant number of branches in the next five years.
BTMU, a member of Mitsubishi UFJ Financial Group Inc., is Japan’s premier bank, with a global network spanning more than 40 countries. Outside Japan, BTMU offers an extensive scope of commercial and investment banking products and services to businesses, governments and individuals worldwide.
Security Bank posted a record net income of P7.7 billion in 2015, up by 7 percent from P7.2 billion a year ago, on sustained strength of core businesses. The 2015 profit translated into a 15.2-percent return on shareholders’ equity.
Loans increased 24 percent to P240 billion, while deposits grew 17 percent to P290 billion.