The Market Monitor Minding the Nation's Business
Security Bank Corp. has targeted the opening of at least 500 branches nationwide in the next four to five years, with a focus on strengthening its provincial presence.
Security Bank President and CEO Alfredo Salcedo Jr. said its goal now is “skewed toward provincial areas,” with a 70-30 ratio.
Security Bank currently has 277 branches all over the country, 15 of which were opened this year.
Salcedo said the target is to open 30 branches this year alone to end the year with 292 branches.
In the next four to five years, the bank aims to open at least 35 branches annually and Salcedo said this is part of their strategy to make retail banking business Security Bank’s third pillar, in addition to wholesale loans and financial market businesses.
Salcedo noted that establishing a bank is not easy because one needs to have the right location and right people and these factors need to be studied carefully since gains from newly opened branches happen only after at least four years.
“To have a successful branch you got to have the right location and right people. And so we’re making sure we have the right location and the right quality of people who will staff those branches because if you don’t have one, if one is wrong, it won’t really perform. It will become a cost-drag,” he added.
Security Bank is currently the sixth-largest domestic bank in terms of asset after its partnership with Japan’s largest bank, Bank of Tokyo-Mitsubishi UFJ Ltd. (BTMU). The tie-up was formalized in April.
BTMU infused P36.9 billion in Security Bank, which was made through the issuance of 150.7 million common shares listed with the Philippine Stock Exchange (PSE).
This investment is the largest so far in the domestic banking industry and enabled the Japanese bank to be the second largest investor in Security Bank after the Dy family.
In the first half of this year, the bank registered a 40 percent rise in net income to P 4.9 billion from year-ago’s P3.5 billion due to higher net interest profit.