Security Bank sees faster than industry growth in loans

MANILA, Philippines - Security Bank expects its loan portfolio to grow faster than the industry rate of between 15 to 18 percent this year, the bank’s top executive said.

Alberto Villarosa, president and CEO of Security Bank, told reporters that the banking industry is poised for another loan expansion due to the continuing growth in the country’s economy.

“I’m looking at 15- to 18-percent growth industry-wide, full year, which is a very healthy loan growth. There are a lot of fund raising going on right now. The general economy is really healthy. The system is going to have a healthy loan growth,” said Villarosa, who is also president of the Bankers Association of the Philippines.

With this, Villarosa said they are optimistic Security Bank would sustain its own loan growth in the second half of the year.

“The first half was driven by both core businesses. Loan growth was about 29 percent in the first half, industry was under 20 percent. There was little diminution in the net margin. It just happened that while the core business is doing well, we happen to have good trading gains,” he said.

He added that “in the second half, our core businesses will continue to do well both on the loans and deposits side.”

Meanwhile, the Bangko Sentral ng Pilipinas (BSP) has approved the bank’s regular semestral cash dividend of 50 centavos per share and special dividend of 50 centavos per share.

Record date for the P1 per share cash dividend is on Oct. 17 while payment falls on Nov. 14.

For the first half of 2012, Security Bank reported net earnings of P5 billion, more than double from P2.4 billion in the same period in 2011.

The substantial improvement in income, the bank said, was brought about by  the continuing expansion of its core businesses and securities trading gains. 

Its loan portfolio grew 29 percent to P110.3 billion, driving the bank’s asset base up 11 percent to P235 billion.  

Deposits likewise grew 26 percent to P130.7 billion as of end-June. 

Net interest income grew to P4 billion, a P500 million or 14-percent increase over the first half of 2011 with net interest margin (NIM) at 3.95 percent.

Non-interest income, net of one-time trading gains, were steady as gains from underwriting fees covered for lower foreign exchange earnings. 

During the period under review, operating expenses, excluding provisions for credit and impairment losses, amounted to P2.9 billion, 40 percent higher than in the comparable period in 2011 mainly due to the significant increase in gross receipts tax as a result of higher revenue, the consolidation of expenses of Security Bank Savings (formerly known as Premiere Development Bank) which was acquired in February 2012, as well as the opening of 10 out of the 50 new restricted-area branches during the first half of the year.  

In June 2011, Security Bank bought Premiere Bank for P1.3 billion which expanded its branch network by 30 percent.