SECURITY BANK Corp. booked lower net earnings in the first semester of the year due to a decline in trading gains and an increase in provisions for income tax.
In a regulatory filing on Tuesday, the listed lender said its net profit in the six months ended June stood at P4.3 billion, down 18% or P951 million from the P5.3 billion recorded in the same period last year.
Security Bank said it logged a lower net income in the said period primarily due to a 59% decrease in its gains from trading from the first semester last year amid market volatility.
The bank meanwhile saw a 55% increase in provisions for income tax year-on-year.
Despite this, the bank’s net interest income climbed 8% to P10 billion from the P9.3 billion booked a year ago.
Net interest income from customer loans and deposits was at P7.4 billion, rising 34% from last year’s P5.6 billion.
Total loans reached P383 billion as of June, 12% higher than the P340 billion recorded a year ago.
Consumer loans jumped 50% and accounted for 18% of Security Bank’s total loan portfolio. Wholesale loans likewise grew 7%.
Security Bank’s non-performing loan (NPL) ratio was at 0.6%, down from last year’s 0.7%, while its NPL reserve cover stood at 261%, which the bank said is the highest in the country.
Meanwhile, the bank set aside P90 million in provisions for credit and impairment losses in the second quarter.
The bank’s total deposits grew 17% or P63 billion to P443 billion in the first semester.
Low-cost deposits rose 15%, while its loans-to-deposit ratio improved to 86% from 90% a year ago, it said,
Meanwhile, interest income from financial investments declined 13% to P4.8 billion from P4.07 billion last year due to a 13% drop in its securities portfolio.
Income from service charges, fees and commissions stood P1.3 billion, up 16%, supported by fees from bancassurance, credit cards and loans.
On the other hand, operating expense grew 12.9% excluding provisions for credit and impairment losses due to its investment in digitalization and information technology transformation.
Return on shareholders’ equity stood at 8.1%, while shareholders’ capital was at P107 billion, up 6% from a year-ago level.
Capital adequacy ratio was at 18.46%, slipping from last year’s 18.95%, while its common equity Tier 1 ratio stood at 16.19% from 16.63% a year ago.
Overall, Security Bank’s total assets stood P722 billion at end-June, down 6.8% from the previous year’s P774.7 billion.
Shares in Security Bank closed at P201.20 apiece on Tuesday, down P3.80 or 1.85%. — Karl Angelo N. Vidal

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