Philippines: Bank of Tokyo-Mitsubishi buys 20% stake in Security Bank for $774m

A clerk counts Chinese yuan and U.S. dollar banknotes at a branch of Bank of China in Taiyuan

Japan’s largest banking group the Bank of Tokyo-Mitsubishi UFJ Ltd (BTMU) has acquired a 20 per cent stake in Philippine private universal bank Security Bank Corp, investing up to $774 million (P36.9 billion).

Security Bank disclosed on Thursday that its board of directors accepted the strategic partnership offer of BTMU which is acquiring 150,707,778 common shares of the Philippine bank at P245 per share, and also 200 million preferred shares priced at P0.10 apiece.

The P36.9 billion fresh capital raised will increase Security Bank’s shareholder capital from P52.4 billion as of September 2015 to Php 89.3 billion on a pro-forma post-transaction basis.

The transaction, expected to be completed within the first half of 2016, is seen to be the largest equity investment in a Philippine financial institution by a foreign investor.

BTMU will become the second largest shareholder of Security Bank with 20 per cent of voting stock. The Dy Group will remain as the biggest shareholder of SECB with majority voting control.

Also read: Philippines: Security Bank divests controlling stake in realty firm Security Land for $34m

BTMU is also scheduled to appoint two directors on Security Bank’s board. Security Bank will become an equity affiliate of BTMU.

Security Bank president and CEO Alfonso Salcedo Jr said, the additional capital will help them execute faster and with more scale in the strategy to build their retail banking business as a third business pillar alongside wholesale banking and financial markets.

“It will allow us to accelerate the expansion of our branch network to support retail market penetration as well as make inroads into the Japanese business sector,” Salcedo said.

Security Bank also looks forward to leverage on BTMU’s extensive relationship with Japanese corporates, global network and expertise to tap new niche markets.

Also read: PH Dealbook: Security Bank, ADB

“We are elated to have BTMU as a strategic shareholder and business partner. The transaction will position Security Bank as a large independent bank supporting the growth of the Philippine economy,” said Security Bank chairman of the board Alberto Villarosa.

A member of Mitsubishi UFJ Financial Group Inc (MUFG), BTMU is Japan’s premier bank, with a global network spanning more than 40 countries. Outside Japan, BTMU offers commercial and investment banking products and services to businesses, governments and individuals worldwide.

MUFG, meanwhile, is one of the world’s leading financial groups with total assets of JPY 286 trillion or $2.4 trillion as of March 31, 2015. Its services include commercial banking, trust banking, securities, credit cards, consumer finance, asset management and leasing.

Security Bank is the sixth largest private domestic universal bank in the Philippines by total assets at P482 billion as of September 30, 2015.

Security Bank’s last trading price increased 7.33 per cent or P9.90 to close at P144.90.

Also read: PH’s Metrobank partners with Japan’s Bank of Yokohama

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.