SECURITY BANK Corp. (Security Bank) recorded an increase in its earnings in the second quarter, boosting its first-half performance, fuelled by double-digit growth in its net interest income.

In a disclosure to the local bourse on Tuesday, Security Bank said its bottom line soared by 31.4% to P2.43 billion in the three months ended June from the P1.85 billion seen in the comparable year-ago period, with net interest income expanding 24% to P4.9 billion in the quarter.

This boosted its January to June earnings, which reached P5.2 billion, up 8.1% from its earnings in the same period in 2016, on the back of a 26% rise in its net interest income to P9.3 billion, the bank said in a statement.

For the first semester, the growth in its net interest income came on the back of a 27% increase in its total loan book to P340 billion from P268 billion in 2016, along with a 26% expansion in its net deposits to P380 billion from P301 billion previously.

The bank’s low-cost deposits grew 21% while its wholesale loans also booked a double-digit growth of 25%. Corporate lending jumped 23% in the first six months of the year, while middle market loans increased by 27% and consumer loans grew the fastest at 49%.

“Net interest margin was 3.2% in the second quarter of 2017, up from 3.1% in Q1 (first quarter) 2017. Service charges, fees and commissions grew 4% to P1.1 billion,” Security Bank said.

The bank’s total assets posted a double-digit growth of 26% year-on-year to P775 billion as of end-June. Its asset quality remained healthy after its net non-performing loan (NPL) ratio stood at 0.10% as of June compared to the 0.14% seen in the first quarter. NPL reserve cover rose to 220% from the 197% in the first three months.

Meanwhile, its common equity Tier 1 ratio was at 16.6% and capital adequacy ratio at 19%

The lender’s operating expense in the first six months, excluding provisions for possible credit losses and impairments, grew 16% year-on-year due to the 23% rise in its manpower costs for its new branches, retail lending and e-commerce platforms.

“25 new branches were opened in the last 12 months to June 2017. Information technology both hardware and software and branch network expansion costs were reflected in the 44% increase in depreciation and amortization and software costs. Security Bank is in the midst of upgrading its core banking systems to enable the bank to roll out new products and services. The cost-to-income ratio was 49%,” the listed lender said.

To date, the total branch network of the bank is at 296 while it has a total of 667 automated teller machines.

Security Bank shares closed at P228.60 apiece on Tuesday, down by P5.40 or 2.31% from Monday’s finish of P234 each. — Janine Marie D. Soliman

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