Fitch affirms Security Bank rating

MANILA, Philippines - Fitch Ratings, a leading global rating agency committed to providing the world’s credit markets with accurate, timely and prospective credit opinions, affirmed Security Bank Corp.’s (SBC) long-term issuer default ratings at Double B (‘BB’) and its viability ratings (VR) at ‘bb’ with a stable outlook. 

“The VR and IDRs as well as the national rating of Security Bank reflects its strong core capitalization, improving loan loss reserves, as well as its sound funding, liquidity and domestic franchise,” Fitch said in a press statement.

The rating agency added the stable outlook on Security Bank reflects Fitch’s expectation that the bank will largely maintain its steady credit profile over the near- to medium-term, underpinned by a buoyant domestic economy, manageable corporate leverage and low interest rates.

The statement from Fitch was supported by Security Bank’s announcement of its first half financial results. The bank’s business volumes continued to grow, paced by total deposits which increased by 37 percent year-on-year to P179 billion. Low-cost deposits likewise increased by 37 percent. Loans grew by 21 percent to P133 billion from year-ago level.

Loans went to power, utilities, infrastructure, wholesale and retail trade, food and agriculture, consumer goods and other key sectors of the economy. Total assets reached P294 billion, up by 25 percent year-on-year.

Since last year, the bank has been undergoing an expansion program both from an organic and acquisition perspective. Eight more Security Bank branches were opened during the second quarter of 2013.

In 2012, Security Bank made significant investments to expand its branch network, strengthen core businesses and develop new businesses. From 136 branches at the beginning of 2012, the Security Bank group’s network increased by 82 branches to a total of 218 branches as of June 30, 2013. The universal bank has 180 branches and thrift bank subsidiary Security Bank Savings has 38 branches.

Further to the aforementioned numbers, Security Bank’s capital further increased to P38 billion, up by nine percent year-on-year. The bank continues to be among the best capitalized banks in the country. Its book value per share is at P75.82 after the P1.00 per share dividend paid in June 2013, up from P73.37 last December 2012.

“Further diversity and stability in funding, loans and revenue bases arising from disciplined expansion and a more established franchise, together with continued strong core capitalisation, sustained risk-adjusted profitability and improvements in asset quality, would be rating-positive for Security Bank.”, the ratings company added.

Security Bank underscores its performance as the Bank was recently recognized in June 2013 by Asiamoney as the “Best Domestic Bank in the Philippines in 2013.” as well as in April by The Asian Banker of Singapore as the “Best Managed Bank in the Philippines.” Security Bank president and CEO Mr. Alberto S. Villarosa was awarded as the “Best CEO for the Philippines” in The Asian Banker CEO Leadership Award for the period 2011-2013 last April in Jakarta, Indonesia. In 2012, The Banker of the Financial Times of London awarded Security Bank as the “Bank of the Year” in the Philippines.