Security Bank sustains earnings growth

Security Bank Corp. (PSE:SECB) posted a net income of P631 million for 2003 or 24 percent higher than the P508 million it earned in 2002.

The consistent improvement in earnings was attributed to strong revenue growth in net interest margins and service fee and commissions, as well as continuing substantial revenues from its trading businesses. Coupled with further reductions in operating expenses, these factors improved the bank’s cost to income ratio to 56 percent in 2003, down from the 60-percent level in 2002. Total deposits, which stood at close to P50 billion at yearend, also posted gains for the year and showed growth across all fronts.

Security Bank’s NPL ratio reached 9.7 percent at the close of 2003, well below the industry average of 14.8 percent, and an improvement from 10.8 percent the year before. The bank set aside P923 million in provisions in 2003 versus P828 million in 2002, resulting in a significant increase in its NPL cover to 67 percent from 46 percent.

"Ending 2003 with our earnings performance continuing on the uptrend is a great take-off point for our three-year strategic plan," explained Alberto S. Villarosa, Security Bank’s newly appointed president and CEO. "Bringing this number up significantly and sustainably is a key long-term objective, and the existing positive momentum certainly gives our efforts a boost."

The bank’s recently concluded Tier 2 capital notes offering, a vital component of its three-year strategic plan, was rated BB- by Fitch Ratings, and was more than 100-percent oversubscribed, prompting the bank to increase the total offering size from P2.5 billion to P3 billion.

With total assets of P73.5 billion and P10 billion in capital funds at the end of 2003, Security Bank is among the top 10 private domestic universal banks in the country. It is controlled by the family of its chairman, Frederick Y. Dy.