Security Bank net earnings, deposits surge

Security Bank Corp. reported net earnings of P475 million for the first semester this year, or 76 percent better than the P269 million in the same period last year.

"Security Bank’s financial performance this year continues to be outstanding, with net income generated in the first six months of 2003 already at 94 percent of our full year earnings in 2002," Rafael F. Simpao Jr., SBC president and chief executive officer, said.

The bank’s capital adequacy ratio (CAR) improved to 14.5 percent, with capital funds at the P10-billion level before adjustments for a cash dividend declaration of P0.15 per share payable on July 25th to shareholders on record as of July 1st this year.

Earnings per share reached P1.44 from P0.82 in the same period in 2002, while annualized return on equity stood at 9.7 percent, significantly higher than the equivalent 2002 figure of 5.4.

Non-performing loan (NPL) ratio to total loans stands at 9.5 percent end June and remains one of the lowest in the industry. In addition, P489 million was set aside for loan loss provisions in the first semester, resulting in an NPL cover of 56 percent from 50 percent last year.

"Security Bank’s gains were achieved in a difficult business environment, with continuing weak loan demand holding loan portfolio levels flat," the bank president pointed out.

Efforts to reallocate assets towards investment securities boosted fixed income trading gains, while ongoing fundamental measures geared towards generating new revenue streams and reducing operating expenses were likewise successful in the first half. These include the expansion of business volumes via focus on total customer relationship management and maximizing product cross-sale opportunities; the continuing rationalization of branches, products, and account relationships; and emphasis on building up fee-based income.

In the second half of 2003, Security Bank will be following through on its branch rationalization and relocation program, to be highlighted by the opening of a modern premier branch in Alabang. The Bank will also be launching new corporate and retail cash management services, building on its insurance distribution business with joint venture partner Philamlife, and promoting its new credit card brand, the Security Bank MasterCard.