INTERNATIONAL credit watcher Moody’s Investors service said the recent cash management deal between Security Bank Corp. and MUFG Bank Ltd. (MUFG) is credit positive for Security Bank.
Earlier this month, Security Bank announced it has signed a deal with MUFG to expand the international lender’s access to the local bank’s cash management system.
The agreement will open Security Bank’s cash management program, DigitBanker, to MUFG. This will, in turn, provide MUFG’s clients with products and services that are suited to the domestic front. It also intends to allow MUFG’s clients to extend their collection network in different parts of the country through the DigiBanker platform.
According to Moody’s, the expanded partnership between the two banks is expected to “encourage increased business flow and help Security Bank broaden its corporate client base to MUFG’s customers while credit demand in the Philippines is subdued.”
Moody’s added that the cash management initiative with MUFG will increase Security Bank’s low-cost corporate deposits, which will reduce its funding costs.
Aside from that, the credit watcher also said the local bank stands to benefit from fee income through ancillary services such as overseas transfers and settlements.
Just last week, Moody’s announced that they have reverted their assigned outlook to the Philippine banking sector back to “stable” from “negative.”
In an outlook note, Moody’s said the main basis of their action reflects their expectations that a “mild economic recovery” will support the operating environment for Philippine banks. The ratings agency, however, warned that asset risks remain high because of a “prolonged curtailment” of business activity, high unemployment rate and weak consumer sentiment.
A Moody’s rating outlook is an opinion regarding the likely direction of a rating over the medium term. Having a negative outlook means that the rated system will likely face a downgrade, while a stable outlook means that the current rating will hold barring unforeseen circumstances.
PDS Awards
THE Security Bank group was recognized by the country’s fixed income exchange, the Philippine Dealing System Group, in the recently concluded PDS Annual Awards held last March 26.
The bank bagged the “Top Fixed-Income Cash Settlement Bank” award for generating the highest volume for the year, as measured by the total number of fixed-income transactions settled. Meanwhile, the bank’s investment house SB Capital Investment Corp. was recognized among the “Top 5 Corporate Issue Managers/Arrangers” in 2020.
“Public interest in fixed income as a form of investment during unprecedented times has grown exponentially, with more clients looking to safe-haven investments as a form of insurance in these tough times. This recognition is a testament to our commitment to providing a better banking experience to our clients,” SB Capital President Virgilio O. Chua was quoted in a statement as saying. “These accolades are important as it indicates that we are doing our jobs right and that we are serving our customers well.”
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