Retail News CRM

Tag: Bank of Tokyo

  • Top Japan bank buys 20% of Security Bank

    Top Japan bank buys 20% of Security Bank

    Bank of Tokyo-Mitsubishi UFJ Ltd., Japan’s biggest bank, is buying a 20 percent stake in the Philippines’ Security Bank Corp. in a deal expected to expand both institutions’ market reach.

    Security Bank Corp. said the deal would infuse an additional P36.9 billion in capital with BTMU investing in newly issued common and preferred shares. The sale remains subject to regulatory approvals and other conditions.

    Described as the largest equity investment in a Philippine financial institution by a foreign investor, the stake sale 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.

    “The additional capital will help us accelerate our strategy over the next three to five years of building our retail banking business as a third business pillar alongside wholesale banking and financial markets,” said Alfonso Salcedo Jr., Security Bank president and chief executive officer.

    Salcedo said the bank would be able to scale up its branch network much faster, from the current 262 to more than 500 branches by 2020.

    “We will be able to conveniently serve our customers with a larger network, offer them a comprehensive range of financial services, as well as make inroads into the Japanese business sector, tapping on BTMU’s expertise,” he added.

    The strategic partnership will result in BTMU, the commercial banking entity of Mitsubishi UFJ Financial Group, becoming the second largest shareholder of Security Bank.

    BTMU will be appointing two directors to Security Bank’s board, while Security Bank will become an equity affiliate of BTMU.

    The Dy Group will remain as the biggest shareholder of Security Bank with majority voting control.

    Through the partnership, BTMU aims to establish a comprehensive financial service platform, including retail banking, to meet clients’ needs in the Philippines. It has adopted similar equity alliance deals in Asia including Vietnam.

    Seeking to take advantage of the fast-growing Philippine market and the economy’s attractive fundamentals, BTMU expects to expand its business platform indirectly through the investment in Security Bank, which is known for its retail and small and medium business capabilities that will be new business areas for BTMU in the country.

    “BTMU has been focusing on Asia as one of its core markets for growth. It is a strategic intent for the bank to identify the right partner in the higher growth markets like the Philippines to deepen our presence, including through inorganic means,” said Go Watanabe, chief executive officer of BTMU for the Asia and Oceania region,
    “This strategic partnership with Security Bank reinforces our Asia strategy and enables both parties to offer more comprehensive financial services to a wider range of customers in the Philippines. We believe in Security Bank’s growth strategy and are keen to play a role and be part of its transformational journey, “he added.

    For Security Bank, the partnership with Japan’s largest banking group is expected to enhance shareholder value by accelerating the bank’s growth strategy, including the
    expansion of its branch network and increasing its retail market penetration.

    It also expects to tap BTMU’s extensive relationship with Japanese corporates, its global network, and diverse range of functions and expertise within MUFG.

    “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 Philippines’ economy, with the strength and capabilities to compete with other larger financial institutions,” said Alberto Villarosa, Security Bank chairman.

    Lees ook:

  • Mitsubishi UFJ considers buying Asian bank similar to Thai unit

    Mitsubishi UFJ considers buying Asian bank similar to Thai unit

    Go Watanabe, CEO, Asia-Oceania at Mitsubishi UFJ said that we’re looking for a bank that is very strong in both corporate and retail consumer finance akin to Bangkok-based Bank of Ayudhya Pcl. Photo: Bloomberg

    Singapore: Two years after spending about $5 billion buying a Thai bank, Mitsubishi UFJ Financial Group Inc. is looking for a similar Asian investment.

    Japan’s biggest lender is considering acquiring a bank in Indonesia, the Philippines or India that has expertise in consumer banking, said Go Watanabe, chief executive officer (CEO) of the main lending unit’s Asia-Oceania arm.

    “We’re looking for a bank that is very strong in both corporate and retail consumer finance” akin to Bangkok-based Bank of Ayudhya Pcl, Watanabe, 56, said in an interview on Monday in Singapore. The company ideally wants a majority stake in a “relatively big-sized bank,” he said.

    Mitsubishi UFJ has been the most aggressive of Japan’s banks in seeking to tap Asia’s consumers as sluggish growth and shrinking loan margins hamper prospects at home. Regulators in Indonesia, the Philippines and India are at various stages of easing rules on ownership of their banks by foreign lenders.

    “Doing business with corporates isn’t enough,” Watanabe said. “Having a retail business is something we want, to capture the high growth of the Asian economy.”

    Asia excluding Japan is poised to expand 6.2% this year, compared with 0.9% in Japan, according to economist estimates compiled by Bloomberg.

    That growth is reflected in Bank of Tokyo-Mitsubishi UFJ Ltd’s loan book. Average loans outstanding in Asia to non-Japanese borrowers climbed 10% from a year earlier to ¥7.6 trillion ($62 billion) in the six months ended March, company data show. That excludes Bank of Ayudhya’s loans.

    Ownership rules

    Loosening of bank ownership restrictions may favour Watanabe’s aspirations to obtain a majority stake in one of the target countries.

    India now allows overseas holdings of as much as 74%, up from 49% previously. Indonesian regulators in June allowed South Korea’s Shinhan Bank to buy two lenders and merge them, providing an exception to a 40% foreign-ownership limit. The Philippines eased its rules last year to let international companies fully own a domestic bank.

    While Watanabe has spoken to relevant authorities, he said there is no discussion of specific targets. The acquisition plan, while part of the bank’s three-year strategy, may materialize after the period, he said.

    Mitsubishi UFJ is among 12 firms that expressed interest in buying United Coconut Planters Bank from the Philippine government, which is seeking more than $350 million for its 74% stake, people with knowledge of the matter said in June. Watanabe declined to comment on the sale.

    Long-term commitment

    The Japanese company is investing in foreign banks for the long term, Watanabe said. In Thailand, it gave up its banking license and merged its local unit into Bank of Ayudhya, the nation’s fourth-biggest bank by market value, to gain the central bank’s endorsement.

    “We are already committed,” he said. “There is no return.”

    Bank of Tokyo-Mitsubishi UFJ now owns 77% of Bank of Ayudhya, whose net income grew 19% last fiscal year to THB14.2 billion ($420 million). It bought a 20% stake in state-owned Vietnamese lender VietinBank in 2013.

    Watanabe moved to Singapore in July 2013 to take up his current role, reflecting a strategic shift at the Japanese bank, which previously ran all its Asian units from Tokyo. Singapore is now the regional headquarters for the 12 countries under Watanabe’s supervision, from Australia to India.

    Bank of Tokyo-Mitsubishi UFJ now has 1,200 employees in Singapore, 200 of whom are Japanese, Watanabe said. While the company is unlikely to add headcount in the city-state, it’s seeking to boost the number of local hires to cater for an increasingly international client base, he said.

    “The growth is now with non-Japanese companies, like European and US multinational companies that are growing in Asia,” he said. “That’s the business we’d like to expand.”

    Lees ook: