GT Capital ventures into microfinancing

MANILA, Philippines - GT Capital Holdings Inc. is dipping its hands into the microfinance sector after spending about P380 million to acquire a 20 percent stake in a financing firm partly owned by its thrift bank arm.

The flagship company of taipan George Ty is set to acquire four million shares of Sumisho Motor Finance Corp. (SMFC) at P94.98 per share as part of its entry into microfinancing, specifically motorcycle financing.

The holding company’s board of directors approved the acquisition of two million shares worth P189.96 million from PSBank and two million shares from PSBank Retirement Fund worth P189.96 million.

The acquisition cost amounting to P379.92 million would be settled on or before Aug. 11

After the sale, PSBank would still own six million shares equivalent to a 30 percent stake in SMFC.

SMFC is a joint venture between Philippine Savings Bank (PSBank), PSBank Retirement Fund, Sumitomo Corp., and Sumitomo Corp. of the Philippines. It was incorporated in 2009 primarily to engage, transact, or deal in the business or lending or leasing to retail customers for their purchase of motorcycles in the Philippines.

“In addition, it will give the group an opportunity to tap the low to middle income sector of the Philippine market — the primary clientele of SMFC. Lastly, it will strengthen the group’s strategic relationship with the Sumitomo Corp., one of Japan’s leading conglomerates,” GT Capital said in a disclosure to the Philippine Stock Exchange (PSE).

On the other hand, SMFC would be able to harness GT Capital’s strength by developing synergies across various businesses within the group such as automotive assembly, dealership, financing, property development, insurance and banking.

PSBank, the thrift bank arm of Ty-led Metropolitan Bank & Trust Co. (Metrobank), said in a separate disclosure the proceeds of the sale would be used to beef up the bank’s capital base.

GT Capital is the holding company of the Metrobank Group that has an 82.67 percent stake in PSBank.

“PSBank will benefit from this transaction as this will improve its Tier 1 capital ratio and the Bank’s capital adequacy ratio (CAR) in line with its capital planning initiatives under Basel III,” it said.

The bank’s total capital adequacy ratio stood at 14.2 percent and Tier 1 ratio at 11.3 percent, above the benchmark of 10 percent and 9.3 percent, respectively, set by the Bangko Sentral ng Pilipinas (BSP).