SECURITY BANK Corp. said net profit rose 17% in 2019, amid wider margins and robust growth in retail lending, alongside gains in lending operations overall.

Net profit was P10.1 billion, it said in a filing with the bourse Friday.

Revenue grew 33% to P33.9 billion, buoyed by sustained growth in income from core businesses.

Net interest income rose 29% to P26.8 billion. Meanwhile, the net interest margin in 2019 improved by 66 basis points (bps) to 3.93%.

The bank said net interest income rose 43% to P22.5 billion, backed by sustained growth in retail loans and low-cost deposits.

Total loans grew 9% to P456 billion while low-cost deposits rose 19%, accounting for 45% of total deposits, up from 38% in 2018.

Retail loans grew 56%, expanding their share of the loan portfolio to 29% from 20% in 2018.

Wholesale loans declined 2% as loan demand leveled off as the bank maintained pricing discipline.

Security Bank said the net interest spread between loans and deposits and peso bonds in 2019 rose 112 bps year-on-year to 5.53% in 2019.

Meanwhile, service charges, fees, and commissions rose 40% to P4.1 billion.

“Fee income was driven by credit cards, loan fees, deposit charges and bancassurance,” the bank said.

Securities trading gains rose 320% to P1.5 billion. Overall non-interest income rose 49% to P7.1 billion.

Operating expenses grew 18% following a 13% rise in manpower costs.

Security Bank said headcount rose by 722 to 6,625 to “support growth of the retail banking business and transformation of the bank’s infrastructure, processes and culture.”

The bank’s cost-to-income ratio net of gross receipts and documentary stamp taxes (GRT and DST) was at 42.2%, against 47.5% in 2018.

Including GRT and DST, the cost-to-income ratio improved to 51.1% from 53.9% in 2018.

The return on shareholder equity rose to 8.9% from 8.1% in 2018.

In 2019, Security Bank set aside P4.2 billion as provisions for possible credit losses, significantly larger than the P714 million worth of provisions in 2018, amid “the rapid growth in retail loans and provisions for selected commercial sectors.”

The bank’s non-performing loans (NPL) totaled P5.3 billion at the end of the year from P6.5 billion at the close of the third quarter, bringing the gross NPL ratio to 1.17%, which is below the 2.09% industry average.

Security Bank said its NPL reserve cover was 106% in 2019, against 111% a year earlier.

The liquidity coverage ratio was 115% and the net stable funding ratio 113%, both above the regulatory minimum of 100%. The capital adequacy ratio was 17.9%, against 18.7% a year earlier.

Its Common Equity Tier 1 Ratio was 16.9% in 2019, against 16.4% in 2018.

Total deposits rose 2% to P499.6 billion.

In 2019, the bank issued P8.37 billion worth of long-term negotiable certificates of deposit and P18 billion worth of peso corporate bonds to diversify its funding base, extend the tenor of its liabilities and support expansion.

In the fourth quarter, net profit rose 16% year-on-year to P2.4 billion. The result for the period was down 12% against the third quarter due to higher provisions for credit losses.

During the quarter, revenue rose 43% year-on-year to P9.8 billion.

Net interest income rose 44% year-on-year to P8 billion, with net interest income growing 50% to P6.6 billion.

The net interest margin in the fourth quarter rose 114 basis points year-on-year to 4.52%.

Service charges, fees and commissions grew 28% to P1.2 billion.

Excluding GRT and DST, operating expenses rose 21% year-on-year. Including GRT and DST, they grew 24%.

During the quarter, the provision for credit losses was P2.4 billion, up from P487 million a year earlier.

On Friday, Security Bank closed at P154.40, down 5.80%.

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