MANILA, Philippines - The SM mall and banking conglomerate is gearing up for the Association of Southeast Asian Nations (ASEAN) regional economic integration.
While the mall and property businesses are already competitive, the banking unit needs to scale up to take advantage of an increase in potential customers, executives said yesterday.
“We need to think regional. The ASEAN Economic Community (AEC) integration means a market base of 600 million consumers that will support future growth,” SM Investments Corp. (SMIC) vice-chairperson Teresita Sy-Coson said.
“We need to further scale up our banking operations to a comparably regional scale,” Sy-Coson said, adding that top three banks in the Philippines are not yet regional in size.
Sy-Coson said BDO Unibank Inc., Philippines’ largest lender in terms of assets, is always looking for merger and acquisition opportunities.
The AEC would facilitate free flow of goods, services, labor, investments as well as capital in the economic bloc starting in 2015.
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For the financial sector, the economic integration will lower banking costs, increase efficiency and improve mobility of savings, Sy-Coson said.
For its part, SM Prime Holdings Inc. is confident of its position as one of the top property firms in the region.
“We have scaled up. By combining all the property groups, we are now one of the biggest in Southeast Asia so there is an economy of scale from the integration,” said SM Prime chief finance officer Jeffrey Lim.
In May, SMIC announced the merger of its real estate businesses through a P279-billion transaction. It allowed integrated real estate company SM Prime to become the most valuable property firm in Southeast Asia with P284 billion in assets, P58.4 billion in revenues and a total landbank of 920 hectares.
Lim said for it expansion, SM Prime will continue to focus in the Philippines and in China.
SMIC is into five core businesses: retail (SM Retail Inc.), malls (SM Prime), banking (BDO Unibank and China Banking Corp.), property (SM Development Corp.) and hospitality (SM Hotels and Conventions Corp.).