TOKYO -- Japan's MUFG Bank is making further inroads into the Philippines with plans to pour roughly 5 billion yen ($47.2 million) into consumer finance company SB Finance.
The Mitsubishi UFJ Financial Group banking subsidiary is making the investment through group member Bank of Ayudhya of Thailand. It will gain a 50% stake in the Philippines' No. 4 provider of unsecured consumer loans by balance.
MUFG Bank owns 20% of SB parent Security Bank. The planned investment will help strengthen capital ties between them as well.
Bank of Ayudhya is Thailand's largest provider of unsecured retail loans. It will send personnel to SB to provide screening and collection know-how that will be married to Philippine sales strategies to bolster SB's operations.
The move will also let Bank of Ayudhya break into a new market. The Philippine economy has enjoyed 6%-plus annual growth, and demand for retail loans is only expected to grow. Meanwhile, the Thai central bank is tightening controls on lending amid concerns over growing household debt.