Security Bank net income  up 36% in first 9 months

Security Bank Corporation (SECB) posted a 36 percent growth in net income for the first nine months of this year registering a P1.83 billion performance, compared to the P480 million income from the same period of last year.

Because of this development, the bank has announced to give its stakeholders a 20 percent return of equity.

“We have directed considerable focus and energy in shifting our business towards steadily building quality loan assets with an enhanced yield profile and leveraging on the customer relationships cultivated over the last few years to further improve the other income component of our business as we anticipated a more challenging environment for generating trading gains,” said Security Bank president and chief executive officer (CEO) Alberto S. Villarosa.

A crucial component of its performance over the past nine months is a remarkable 26 percent growth in its loan portfolio to P42.3 billion which helped propel SECB’s year-to-date net interest income to P3.4 billion, a 25 percent increase over the same period last year.

Likewise, Villarosa said the bank’s other income performance posted substantial growth increasing 15 percent to P2.1 billion by the end of third quarter this year.

On the other hand, Carlos M. Borromeo, the bank’s chief financial officer (CFO), expounded further on bank’s other income performance.

“The numbers are considerable. We were able to achieve a very significant P217 million or 51 percent growth in service charges to close the nine month period at P648 million. This resulted from the increased customer base and deposit base we have built,” Borromeo said.

According to Borromeo the bank also managed to reflect a 69 percent increase in miscellaneous income to P450 million with reduction in asset disposal losses that characterized the same nine month period the previous year.

The healthy growth in these other income components offset the 12 percent reduction in foreign exchange and trading gains to close the period at P959 million.

In a related statement, Borromeo added that the bank has directed a significant amount of focus to building an increased customer base that contributed greatly to the growth in fees and service charges.

“This is in consonance with our strategy to build a greater component of recurring revenues in anticipating of a more challenging environment for generating opportunistic trading gain revenues,” Borromeo added.

Year-to-date operating expenses registered P3.2 billion, up 17 percent over the P2.8 million recorded a year earlier, arising from a combination of investments in the bank’s workforce and one-time expenses.

Aside from the significant shareholder return achieved, the bank’s further leveraged on its asset base, accomplishing an average return on assets of 1.8 percent.

The combined results translate to earnings per share for the nine-month period of P5.56 per share compared to P4.11 per share the prior year.

In a statement, the bank announced that it continues to register superior results which have resulted in a 16 percent increase in its share price from P65.50 per share at year-end 2006 to the current level of P76.00 per share.