For years, the best bank in The Philippines award has been the preserve of BDO Unibank, which remains the biggest and in many respects the best. Security Bank, by contrast, is a mid-size bank, less than a quarter of BDO’s market cap and revenue and delivering a third of its profitability. It has just 5% of the market in terms of loans, assets and deposits.
A closer look at the numbers other than scale paints a more interesting picture. Security Bank beats BDO on return on equity, return on assets, cost/income ratio, NPLs, and NPL coverage. In most of those metrics, it leads the whole industry.
Is this just a case of growth off a low base? It’s true that Security Bank’s 24% loan growth in 2015, double the overall industry, and its 68% growth in consumer loans due to home and auto loans and credit card receivable, can’t be expected to be maintained as the bank gets bigger. But these are the fruits of a multi-year re-invention, now led by CEO and President Alfonso Salcedo, and epitomized by its BetterBanking rebrand in the retail business. The bank picks its spots, focuses and aims to be the best at what it does rather that the biggest. And it takes pride in not being part of a conglomerate. ( though it is owned by the Dy family).
One big investor that likes what it sees is Japan’s Bank of Tokyo-Mitsubishi UFJ, which struck a strategic partnership with the Philippine lender in January and put in Ps36.9 billion ($803 million) of investment on April 1. It gives Security Bank capital, long –term funding, and a considerable show of faith, as well as a way in to Japanese corporates with banking needs in the Philippines. No foreign investor has made such a big equity investment in a Philippine bank.