Security Bank, Marubeni form leasing firm

MANILA, Philippines - Security Banking Corp. has entered into a joint venture with Marubeni Corp. of Japan to form a leasing company with an initial capital of P200 million.

The new leasing company will be 60 percent owned by Security Bank and 40 percent by Marubeni.

While it is not the first time the bank has ventured into the leasing and finance business as it has a existing subsidiary, Security Finance Inc., which specializes in loan packages for car financing and leasing, equipment leasing, housing loan, commercial loan and receivables discounting, it, however has been inactive but will be the core of the new joint venture.

Security Bank president and chief executive officer Albert S. Villarosa said that joint venture would initially focus on heavy equipment for construction and mining. “But there is a lot of business also for buses and trucks,” he added.

He likewise revealed that Marubeni has an existing machinery distribution partnership in the Philippines called Maxima Machineries Inc.

Bank officials said there is a huge potential for further infrastructure development in the Philippines, particularly in the mining, power and construction sector.

“They (Marubeni) will not enter into a financial partnership without being sure they have the numbers. And that is how we see it, too,” they added.

Meanwhile, Villarosa said they are projecting a double-digit growth in lending this year.

Loans ballooned 25.7 percent to P16.8 billion in the first three months of 2011. At the end of 2010, the loan portfolio stood at P74.5 billion.

Villarosa said the drivers for growth this year will be the consumer and middle-market lending and the growth of the capital and investment markets.

“There are a couple of equity offerings where we would participate as domestic runners,” Villarosa said, adding that there are likewise opportunities for huge revenue streams from its treasury operations would still continue to give us revenues.

Last year, Security Bank recorded a net income of P7.2 billion, or 134 percent higher than the P3.06 billion in 2009. It likewise recorded a return on equity (ROE) of 35 percent.

Total revenues rose to P12.9 billion. The growth in core revenues was significantly enhanced by the P4.8 billion in trading and securities gains recorded for the year.