Security Bank profit jumps to P1.7 billion in Q3

MANILA, Philippines — Earnings of Security Bank Corp. jumped by 16 percent to P1.71 billion in the third quarter from P1 billion in the same quarter last year due to the sharp drop in provision for potential loan losses.

From July to September, the bank reported an 8.4 percent decline in net interest income to P6.71 billion from P7.55 billion in the same period this year, while other operating income plunged 67.5 percent to P2.21 billion from P6.81 billion.

As a result, Security Bank’s total operating income fell 36 percent to P9.13 billion in the third quarter from P14.36 billion in the same quarter last year.

In the third quarter, the bank booked a net loss of P46.7 million from trading and securities, a complete reversal of the P5.18 billion gain recorded in the same quarter last year.

On the other hand, earnings from service charges, fees, and commissions increased 17.5 percent to P1.06 billion from P906.62 million.

The bank’s total operating expenses plunged 54 percent to P7.04 billion from P15.25 billion as provision for credit losses only amounted to P1.65 billion in the third quarter versus the P10.07 billion booked in the same quarter last year as the pandemic continues to impact the commercial loan portfolio.

“We are optimistic on the improvements in the economic and health data over the past few weeks and the subsequent steps taken to open the economy. The bank is well positioned to support our clients as they recover from the pandemic impact,” Security Bank president and chief executive officer Sanjiv Vohra said.

For the first nine months, the net income of Security Bank fell 27.5 percent to P4.83 billion from P6.66 billion in the same period last year.

Net interest income declined 12.4 percent to P20.5 billion from January to September compared to P23.4 billion in the same period last year as net interest margin declined 58 basis points to 4.32 percent from the third quarter of last year.

Likewise, non-interest income plunged 58.5 percent to P6.98 billion from P16.84 billion resulting in a 31.7 percent drop in total operating income to P27.47 billion from P40.23 billion. Trading and securities gains fell 89.6 percent to P1.05 billion from P10.12 billion, while foreign exchange gains dropped to P42.58 million from P1.05 billion.

On the other hand, income from service charges, fees and commissions jumped 24.2 percent to P3.21 billion in the first nine months from P2.59 billion in the same period last year.

During the nine-month period, the operating expenses from Security Bank fell 45.6 percent to P19.83 billion from P36.47 billion as provision for potential loan losses plunged 80.6 percent to P4.09 billion from P21.06 billion.

Security Bank’s loan book slipped to P449 billion, while its deposit base grew by 20 percent to P522 billion. It continues to be among the country’s best capitalized private domestic universal banks with a common equity Tier 1 ratio of 19.5 percent and a capital adequacy ratio of 20.1 percent.