Security Bank targets emerging market of affluent consumers


Security Bank Corp. (SBC) said it has completed a rebranding of its retail banking business to strengthen profit growth and cater to the banking needs of the newly affluent segment of the population.

In a press briefing on Tuesday, Alberto Villarosa, SBC president and chief operating officer, said that the rebranding is part of the bank’s strategy to widen its retail banking reach.

Villarosa explained that to date, retail banking has contributed less than 10 percent of SBC’s total loan portfolio.

“Our medium-term objective is [for the retail banking business]to be one of the three legs of the universal bank, and contribute to one-third of the bottom line of the bank moving forward,” he said.

Ma. Cristina Tingson, head of SBC’s retail banking segment, said the rebranding was necessary to align the bank’s operations with its growth strategy.

“Now that economy is more stable, it’s a given that every financial institution has to be stable too. The whole rebranding exercise is really a support for our retail bank strategy [for it]to become a very rigid pillar to the bank,” she said.

Tingson noted that SBC’s profitability has been generated mostly by its wholesale business, so strengthening the retail business would ensure a more diversified and sustainable profit growth.

Affluent market
As part of the rebranding, retail banking will target the so-called emerging affluent customers, Tingson said.

“We have done to a lot of research trying to determine what this market really wants, what the gaps are, and what the markets are looking for in the industry, which is not being served. That’s where we are capitalizing on,” she said.

The bank classifies the “emerging mass affluent” and “mass affluent market” as individuals or households that generate an income of about P600,000 and above per year, with a monthly salary of P50,000.

“It is 10 percent of the total population of the country. These are the people who want to start to build their lives; build homes, start buying car, and start to think about savings for their lives to be better,” she said.

In terms of market concentration, the bank is targeting the affluent market in Metro Manila and other fast-growing areas such as northern and southern Luzon, Cebu, Davao, Leyte, Bacolod and other regions where growth is fueled by agri-industry.

SBC is also confident that it has the optimum number of branches to effectively service its target market for retail banking. From only 117 branches six to seven years ago, the bank currently has 244 branches, including those of its unit Security Bank Savings.

In 2013, SBC posted net profit of P5 billion, about a third lower than its record earnings in 2012. Given the high base of earnings last year, the bank expects profit growth in 2014 to be more modest.

“We are coming from a high growth in 2013 and we are still projecting and hopeful we can achieve—probably not in the same terms—but decent [profit growth]from last year,” Villarosa said.


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