Security Bank nets P3.6 B

MANILA, Philippines - Security Bank Corp. more than doubled its net earnings in the first semester of 2014 to P3.614 billion, from P1.7 billion in the same period last year, earnings coupled with a 17.2 percent return on equity (ROE).

“This result was driven by sustained growth in the bank’s core businesses,” Alberto S. Villarosa, Security Bank president and chief executive officer, said.

Core revenues – which consist of net interest income, fee-based income, and trading gains attributable to customer flows – increased 31 percent year-on-year to P7 billion.

Net interest income increased 46 percent to P5.8 billion while net interest margin was maintained at 3.5 percent.

Fee-based income, inclusive of asset management, was recorded at P850 million.

“Overall trading gains contributed P1.66 billion,” Villarosa said.

Security Bank’s total operating income increased 59 percent year-on-year to P8.4 billion while operating cost (excluding provisions for credit losses and impairments) grew 11.8 percent.

“All of our business segments strongly contributed to the results, thanks to the healthy economy and our strong customer focus and business discipline,” Villarosa added.

Loan portfolio increased 30 percent year-on-year to P173 billion, investment securities expanded 106 percent to P111 billion, and deposits grew 22 percent to P218 billion, which fuelled a 31-percent year-on-year increase in total assets to P385 billion.

The loan-to-deposit ratio was 79 percent, while return on assets (ROA) was 1.9 percent.

Gross non-performing loan (NPL) ratio stood at a healthy 0.57 percent versus 0.59 percent a year ago. Provisioning for probable losses was maintained at P700 million, further increasing the reserve cover to 297 percent as of June 30, 2014 from 266 percent a year ago. Pre-provision operating profit (PPOP) was at P4.3 billion, representing 143 percent year-on-year increase.

Last month, July, Security Bank successfully issued P10 billion in Basel III-compliant Tier 2 notes to further increase its total capital adequacy ratio (CAR) to support the continuing growth in its earning assets.

“Our cost efficiency continues to improve, with cost-to-income ratio at 44 percent in the first semester of the year. Our CAR under Basel III are sustained at healthy levels, with common equity Tier 1 (CET 1) at 13.2 percent and total CAR at 14 percent,” Joselito E. Mape, Security Bank chief financial officer, said.

Meanwhile, 10 branches were opened in the second quarter of 2014, bringing the combined network to 253 branches and 444 ATM as of end-June.