Following robust 60-percent growth in its MSME loan portfolio during the third quarter, Security Bank Chief Financial Officer Eduardo Olbes told reporters last week that the bank was looking at the business “on a very focused basis.”
The bank last year launched an MSME-dedicated segment, which Olbes said was at the moment “a small part of the total.”
“It’s approximately 3 percent of total loans that is growing super-fast for us, but it’s a small base,” he added.
While the loans are being extended to very small and medium-sized companies, “that business has been growing for us, from a loan standpoint, [by] about over 60 percent, which is quite strong.”
Olbes claimed that Security Bank approached businesses such as MSMEs by creating products best suited to their needs.
“[It] basically creates products that are customized for the needs of that space,” he said, “and that’s what has accounted for this very, very fast growth in terms of 60 percent.”
The fast pace of growth in its MSME loan portfolio “gives us confidence about the future because that is your base,” Olbes continued.
These entrepreneurs, he noted, are the ones who want to grow their businesses, “and you want to see activity there because they’re also [going to be] big employers, right?”
“We’ve seen that strength throughout the first three quarters, and we expect that momentum to continue through the fourth quarter,” Olbes said.
He said that Security Bank was further growing its exposure to MSMEs as these businesses not just borrow money but also want support in terms of cash management or systems to help them more efficiently collect from customers and settle with their suppliers.
“For example, if you go online to Lazada or Shopee, and you choose to execute a transaction, you’re going to have to hit a module there in terms of the payment systems, right? Those are the types of services which MSMEs go to banks to do, or ‘help me power my digital website’ so the customer’s experience in collections is solid,” he added.
Olbes claimed that growth in the bank’s MSME and retail loan segments was so far quite healthy, with the trend likely to continue through next year.
For the first nine months, Security Bank saw a 28-percent increase in revenue to P40 billion, with net income growing 12 percent to P8.5 billion.
The bank also plans to expand its business reach by adding 50 new branches, mostly in areas outside of Metro Manila, with a focus on northern and southern Luzon as well as the Visayas and Mindanao regions to help address the financial needs of MSMEs in underserved areas.
Shares of Security Bank closed up 1.52 percent at P86.80 each on Friday.
