As the transaction is unlikely to result in a substantial lessening of competition in the Philippine market, the Philippine Competition Commission (PCC) announced that it has cleared the acquisition by MUFG Bank, Ltd. (MUFG Bank) of a minority stake in JACCS Co., Ltd. (JACCS).
According to the PCC, its Mergers and Acquisitions Office cleared the transaction last 12 August, which involves MUFG Bank acquiring both direct and indirect ownership of JACCS shares through a Capital and Business Alliance Agreement.
MUFG Bank is a major Japanese commercial bank operating in the Philippines via its Manila branch.
Through its Thailand-based subsidiary, Bank of Ayudhya PCL, MUFG Bank is a majority shareholder in HC Consumer Finance Philippines, Inc. (Home Credit Philippines).
Further, the Japanese banking firm holds a 20 percent equity interest in Security Bank Corporation.
On the other hand, JACCS, also based in Japan, is engaged in consumer finance across Asia and operates locally through JACCS Finance Philippines, Inc.
The PCC’s Mergers and Acquisitions Office assessed the transaction’s impact on the nationwide provision of unsecured cash loans by non-bank financial institutions (NBFIs).
“The parties’ combined market share remains limited, and competitive conditions are preserved by the presence of alternative lenders, regulatory interest rate caps, high consumer price sensitivity, ease of switching, widespread multihoming among borrowers, and the growing availability of digital financing platforms. The parties are also unlikely to degrade loan quality, as this poses the risk of losing customers and would contradict their growth objectives,” according to the PCC.
Separately, the PCC assessed the transaction’s impact on the nationwide provision of secured loans for large motorcycles by banks and NBFIs.
Meanwhile, the PCC said the review found that the transaction is likewise unlikely to result in SLC in the market.
“The parties’ combined market share remains low, and competition is sustained by numerous banks and NBFIs that maintain extensive dealership networks and offer diverse loan products. Barriers to entry and expansion, while moderate, are manageable given advancements in digital lending and increasing consumer demand for premium motorcycles," the PCC stressed.
It also noted that Filipino borrowers were also found to be highly sensitive to interest rates and service quality, with dealerships facilitating comparisons among multiple financing options.
"These factors collectively limit the parties’ ability or incentive to raise prices or reduce service standards post-transaction,” the PCC decision further explained.
The approval is expected to support continued competition in the consumer finance and vehicle loan sectors, while enabling strategic growth for both MUFG Bank and JACCS.
