Security Bank counts on MSMEs, retail borrowers in 2025

Security Bank Corp. expects retail clients and micro, small and medium enterprises (MSMEs) to drive the growth in its loan portfolio this year, albeit at a slower pace after topping its 2024 target.

Eduardo Olbes, chief financial officer of the listed bank, said in a press briefing on Thursday in Makati they had sustained a 19-percent loan growth as of the third quarter last year, surpassing its target of about 15 percent.

“We will firm up our guidance for 2025 but I would expect a slight deceleration in terms of loan growth because the base is so high,” he said.

As of latest reporting, Security Bank president Sanjiv Vohra said their loan portfolio stood at P650 billion.

The retail segment—including home and auto loans—accounts for some 29 percent of the total while the MSME loans occupy 3 percent and the rest is wholesale banking clients.

“Filipino consumers still look quite strong in the fourth quarter and therefore for us as a bank our pillar is to continue to support their journey in terms of bridging their aspirations with their resources in 2025 as well,” Olbes said.

“And that would mean basically continued growth in terms of our home loans portfolio, our auto loans portfolio, as well as our credit cards,” he added.

In terms of provisions for bad loans, Olbes estimated it could be “closer to 1 percent” this year or lower than the 1.15 percent as of the third quarter last year.

He noted that bulk of their nonperforming loans were from enterprises who have struggled financially during the pandemic.

Joint venture

Meanwhile, Vohra said they were eyeing to complete the creation of a joint venture with Mitsubishi Motors and the acquisition of its 25-percent stake in Home Credit in the first half.

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In April last year, the listed bank said it would establish an auto financing company with the Japanese automobile maker to extend loans to car buyers. Mitsubishi Motors will hold 51-percent ownership while the rest is owned by Security Bank.

Their collaboration comes at a time when vehicle sales are revving up. Last year, car sales grew by 8.7 percent to a record high of 467,252 units, according to data from the Chamber of Automotive Manufacturers of the Philippines Inc. and Truck Manufacturers Association.

Security Bank also announced its stake purchase in the consumer loans provider last November with Japan’s MUFG Bank Ltd.

Thailand-based Krungsri (Bank of Ayudhya PCL and its business units) will remain Home Credit’s majority shareholder.

Home Credit has over 11 million customers. Its products include cash loans, revolving credit, insurance and warranty service.