Security Bank keeps income goal on track

MANILA, Philippines - Earnings of Security Bank Corp. declined by more than five percent in the first nine months due to lower trading gains.

Security Bank booked a net income of P6.1 billion from January to September, P330 million lower compared to P6.43 billion in the same period last year.

Alfonso Salcedo Jr., president and chief executive officer of Security Bank, said the bank is on track to meet its income target for this year amid the decline in earnings in the first nine months.

“We are on track versus our profit target for the year. Our core revenues are growing at a healthy rate and are poised to make up for lower trading gains when interest rates rise,” Salcedo said.

The listed bank expects to exceed its earnings last year. Security Bank’s profits jumped 43 percent to P7.2 billion last year from P5 billion in 2013.

This translated to a lower return on shareholders’ equity (ROE) of 16 percent in the first nine months compared to 20 percent in the same period last year.

Overall trading gain in the first nine months stood at P2.9 billion from January to September, 19.4 percent lower compared to the trading gain of P3.6 billion in the same period last year.

Security Bank’s loan portfolio surged 20 percent to P217 billion from P181 billion, while total deposits jumped 19 percent to P275 billion from P232 billion. This translated to a loan-to-deposit ratio of 79 percent in the first nine months of the year.

The bank’s consumer loans jumped 81 percent while corporate or commercial loans grew 15 percent from January to September.

“The net interest margin on our customer loans and deposits business has further improved, benefiting from the growth of our consumer and middle market loans and low-cost deposits,” Salcedo said.

Likewise, investment securities at amortized cost portfolio stood at P176 billion as of end September this year.

Net interest income increased seven percent to P9 billion, while fee-based income jumped 48 percent to P1.8 billion, with contribution from bancassurance.  Core revenues went up by 13 percent to P11.5 billion from P10.2 billion.

Security Bank’s total operating income inched up six percent to P14.3 billion in the first nine months versus a year-ago level of P13.5 billion amid the lower trading gains.

Operating expense growth in the nine-month period (excluding provision for probable credit losses and impairments) went up 22 percent in the first nine months of the year.

Security Bank’s assets stood at P482 billion in end September. Its asset quality continued to be healthy as its net non-performing loan ratio stood at 0.31 percent as of end September. Provision for probable credit losses amounted to P599 million translating to an NPL reserve cover of 179 percent in the first nine months.