Security Bank thrift arm turns into financing firm
MANILA, Philippines – Security Bank Corp. is transforming its thrift bank arm into a financing company.
The bank informed the Philippine Stock Exchange (PSE) that its board of directors has approved the amendment in the purpose of Security Bank Savings Corp. (SBS) to a finance company.
The thrift bank would be renamed SB Finance Co., subject to regulatory approvals.
Security Bank was given the green light by the Bangko Sentral ng Pilipinas (BSP) to purchase all assets and assume all liabilities of SBS in January last year as part of integration efforts.
The BSP clarified that SBS would not become a shell corporation after the integration because it would retain cash to meet its capital requirement as a thrift bank.
After one year of dormancy, Security Bank was supposed to go back to the BSP for consideration to resume its banking operations.
Assets and liabilities with carrying values of P8.3 billion and P9.6 billion, respectively, in the books of SBS were sold or transferred to SBC at their fair values of P8.4 billion and P9.7 billion, respectively.
SBS paid Security Bank a total of P1.3 billion for the difference between the fair value of the assets and liabilities transferred.
Last June 1, the BSP approved the extension of the existing thrift bank license of SBS under a dormant status for another year pending the firm up of its business model.
Security Bank owned by the family of businessman Frederick Dy received P37 billion in fresh capital infusion from the Bank of Tokyo Mitsubishi UFJ Ltd. last April in exchange for a 20 percent stake in the listed bank.
The bank’s earnings rose nine percent to P6.6 billion in the first nine months from P6.1 billion in the same period last year as income from core businesses continued to offset the sharp decline in trading gains amid the volatile financial markets.
Security Bank’s total assets reached P680 billion as of end-September making it to the list of the five largest universal and commercial banks in the country.
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