SB Finance Inc., a joint venture between Security Bank Corp. (SBC) and Thailand’s Krungsri, expects to post double-digit growth in both loans and net income this year, driven by an anticipated uptick in economic activity and lower interest rates, its top executive said.
The startup lender, established in 2020 at the height of the pandemic, achieved profitability in the past three years, leveraging its digital services and partnerships with business process outsourcing companies and motorcycle dealerships. SB Finance was also named the best digital consumer lending company in the Philippines by The Asian Banker at its 2023 Finance Philippines Awards.
The company offers personal, salary, business and motorcycle loans as well as cash loans secured by vehicle official receipt and certificate of registration.
“2023 was a very good year for us,” said SB Finance president and CEO Abigail Dans-Casanova in an interview. “We almost doubled our target income, and we’ve been profitable since 2021.”
SB Finance is targeting a 30-percent increase in loans and 30-percent to 40-percent growth in income for 2024. “We will be very aggressive,” she said, referring to expectations set by the company’s parent firms. Interest rates are predicted to moderate by the middle of the year, she said.
She said both SBC and Krungsri are partly owned by Mitsubishi UFJ Financial Group, one of Japan’s largest banks, which is heavily invested in Southeast Asia, where economic growth is projected to outperform other regions.
Casanova, who has 25 years of experience in consumer banking, said SB Finance was established to capitalize on the burgeoning consumer lending market in the Philippines, utilizing expertise and models developed in Thailand.
“It was a black swan event,” she said of the company’s pandemic launch. “No one really expected we would open during that time. We were all working from home. We started the organization remotely, then transitioned to a hybrid model, and eventually decoupled our systems and processes from the bank. Now, we are standing on our own.”
SB Finance operates the Zuki loan app and achieved profitability starting 2021. “2023 was our best year so far,” Casanova said. “I think we ended with about P10 billion in loans outstanding.”
She said SB Finance offers lower interest rates compared to many online lenders. “Our biggest loan size is our personal loan, which is a legacy product from Security Bank,” she said. “Our rates start at 1.892 percent, compared to 3 percent charged by some credit card companies. And if you have a car that’s less than five years old, the rate is even lower at 1.25 percent.”
The company managed to reduce its non-performing loan (NPL) ratio to around 3 percent in 2023 as repayment performance improved.
Casanova said that starting 2024, SB Finance planned to launch new products, including loans secured by land titles and loans tailored to the needs of Filipino seafarers. “We want to be a launching pad for the dreams of our fellow Filipinos,” she said. “It’s not just about lending money. We also want to provide our clients with the right information so they can make informed decisions and become responsible borrowers.”
SB Finance recently teamed up with UBX, an open finance platform, to expand its loan offerings to Filipinos. Under the agreement, UBX’s SeekCap platform will add SB Finance to its roster of lenders, providing a wider range of lending products such as personal loans, business loans, and other credit facilities.