The capital alliance between MUFG Bank and the Philippines’ Security Bank marks its 10th anniversary in 2026. It has been a long-term investment that supports the business activities of Japanese companies while also capturing the financial needs of local businesses and individuals, allowing MUFG to participate in the growth of the Philippine economy.
In April 2016, when it was still known as Bank of Tokyo-Mitsubishi UFJ, MUFG invested about 36.9 billion pesos (roughly ¥95 billion at the yen exchange rate at the time of the announcement) to acquire newly issued shares in Security Bank. The stake stood at 20%, MUFG dispatched two directors, and Security Bank became its equity-method affiliate. MUFG has maintained its 20% holding as of the end of March 2026.
The aim of the investment is to combine MUFG’s international network with Security Bank’s domestic branch network and customer relationships. Through a local bank, MUFG can build a business foundation in a market that would be difficult to reach through its own Manila branch alone. For Security Bank, the tie-up is also an opportunity to gain international financial expertise and the capacity to handle cross-border transactions.
Current performance shows both higher revenue and higher profit. In its most recently published first-half 2026 results, net profit rose 4% year on year to about 6.1 billion pesos, while total revenue grew 11% to 34.9 billion pesos. Operating profit before provisions for loan losses and the like rose 21% to 15.4 billion pesos, indicating improved earning power in the core business. Second-quarter net profit also rose 11% year on year.
Net interest income came to 32.4 billion pesos, with a net interest margin of 5.78%. By holding the growth in operating expenses to 3%, the bank lowered its cost-to-income ratio from 59.6% in the same period a year earlier to 55.7%. Revenue growth outpaced expense growth, a sign of improved management efficiency.
On the other hand, credit loss provisions for the first half reached 7.6 billion pesos, so the growth in net profit was more modest than the increase in pre-provision profit. The non-performing loan ratio fell from 3.16% a year earlier to 3.04%, showing an improvement in loan quality.
Total assets at the end of June rose 3% year on year to 1.19 trillion pesos, while net loans outstanding rose 1% to 675 billion pesos, reflecting the bank’s ongoing effort to prioritize the quality of its loan portfolio over its composition. This suggests an approach that secures profit through improved margins and efficiency rather than relying solely on loan-volume growth.
While MUFG’s Manila branch is expanding its own operations, the two banks intend to continue operating independently. The investment is not a full acquisition but participation as a minority shareholder that leverages the strengths of a local bank. Current results point to improved earning power, but this cannot simply be attributed to the investment alone. Whether Security Bank can maintain sound lending and continue stable profit growth will be the focus going forward.
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