Security Bank eyes more profits from retail, consumer banking

MANILA, Philippines - Security Banking Corp. (SBC) is eyeing a bigger profit contribution of its retail banking business to 35 percent from the present level of about 20 percent, a top bank official said.

SBC president and chief executive officer Alberto Villarosa told a press conference for the launch of the bank’s rebranding initiatives that they expect the retail and consumer banking to account for at least 25 to 30 percent of their bottomline in the next five years.

He said after aggressively studying the Philippine market over the past years, the bank is now going into the third major leg of its operation which is retail banking.

“We expect significant changes, by 2015 to 2016. Peaking by 35 percent in five years. We made sure the banks foundation is strong. Our initiatives give us another leg,” he said.

“Security Bank has been very successful in establishing our corporate banking and middle market. We have built the institution’s financial and corporate state as we had established our presence, we now think it is the opportune time to make our presence in retail banking,” he added.

However, Villarosa pointed out that with all these efforts being carried out, they expect a modest growth in income this year.

To enhance their retail banking activities, he said they would be putting up at least 24 branches this year and about 10 more each in the succeeding years.

From only 117 branches six years ago, the bank now has 244 branches located mostly in strategic areas nationwide.

He said they are also eyeing to double their consumer lending by about 10 percent in the next years to complement the bank’s major transformation into a consumer-centric bank.

Villarosa said the strategy to focus more on retail banking would also help prepare the bank for regional competition.

“Our initiatives are consistent. When regional competition starts to come in we are ready. Opportunity for competition to come in and opportunity for us to go out,” he said.

He said the bank is also well-capitalized to support its expansion program at least for the next two years.

“We have examined our capital and we feel that we are well within the Basel III capital requirements in the next 18 to 24 months,” he said.

SBC has been growing its business over the past decades. In 2013, the bank posted a 34-percent growth in total resources to P348 billion. 

Loans grew 38 percent to P165 billion while investment securities grew by 30 percent to P83 billion by yearend. 

Asset quality remained healthy, with a non-performing loan (NPL) ratio of 0.08 percent and NPL cover of 195 percent as of December 2013.

Total deposits increased 45 percent year-on-year to P206 billion, supported by the opening of 36 new branches in 2013, 34 of which were Security Bank branches and two branches were of thrift bank subsidiary Security Bank Savings.