Security Bank eyes new products for branches

Medium-sized commercial bank Security Bank continues its aggressive stance in looking for various client-friendly products as it bids to register a five-to 10-percent income growth for the whole of 2001.

Robert C. Lehmann, Security Bank executive vice president said that one key step is to strengthen its branches through the introduction of value-added products like bancassurance products and even mutual funds.

And to get these products, the bank could start strategic or working alliances with other financial institutions.

"We are a top-tiered bank among the medium-sized banks and we would like to be identified with top-tired institutions," Lehmann added.

Just last week, the bank held exploratory talks with Sun Life of Canada (Philippines) Inc., the second leading life insurance company and among the country’s upcoming multi-leveled financial institution. Aside from life insurance, Sun Life has formed a mutual fund and a pre-need company.

Of lately, banks have been aggressively introducing a whole gamut of consumer products, which includes automatic teller machines (ATM) cards, credit cards, telemarketing, bancassurance, and common trust funds (CTFs).

"Banks are looking seriously at bringing more consumer products to their branches, and bancassurance is one of these products," the executive vice president explained.

It has a total of 128 branches nationwide and it was ranked number ninth among the country’s commercial banking sector.

Estimates for the yearend net earnings made in the first quarter had been set at a conservative flat growth to a cautious two percent, or from P422 million for the whole of 2000 to P430 million this year. Net earnings grew to P412 million in 1999.

In the first half of the year alone, net income is estimated to hit P235 million. That is practically a fraction better than the P227 million in the same period last year.

The conservative estimates were based on the sluggish Philippine economy at the start of the year. The entire banking industry is estimated to grow by a modest five percent this year.

"Remember that practically all of the country’s commercial banks reported a drop in net earnings last year, and the economy has not picked up yet," bank officials said.

Security Bank had originally planned a capital hike to P10 billion early this year through either convertible debt packaging or sale of preferred shares. The bank already got the nod of the Bangko Sentral ng Pilipinas (BSP) for a Tier 2 capital increase. – Ted Torres