Security Bank Corp. said net profit fell 46.8% from a year earlier to P1.474 billion in the second quarter as it tightened credit standards, leading to lower interest and trading income. 

The bank said in a statement to the bourse Friday that first-half neat earnings came in at P3.12 billion, down 44.9% from a year earlier. 

Security Bank’s net interest income fell 10.72% year-on-year to P6.923 billion in the three months to June. The net interest margin fell to 4.36% at the end of June, compared to the year-earlier 4.71%. 

Income from service charges, fees and commissions rose 72.7% to P1.086 billion, but gains from trading activities declined 89% to P408.28 million. 

The bank booked an operating income for the quarter of P9.56 billion, down from P12.65 billion a year earlier. 

Operating expenses declined to P7.33 billion from P10.35 billion a year earlier. 

In the first half, loans and receivables fell to P425.2 billion from P438.9 billion at the end of 2020 due to the tighter credit standards imposed during the economic slowdown resulting from the pandemic. 

It set aside P2.4 billion in provisions for credit losses in the first half, down 78.2% from a year earlier, when It front-loaded much of its provisioning activity in anticipation of deteriorating conditions for its clients. 

The gross non-performing loan ratio stood at 3.93%, with the bad-loan cover ratio falling to 102.64% from 115.47%. 

Security Bank’s total deposits rose 18.6%  from the start of the year to P522.2 billion in the first half, driven largely by time deposits. 

The capital adequacy ratio stood at 20.39% at the end of June, well above the central bank’s minimum requirement of 10%. 

The bank reported a return on equity of 5.05% at the end of June, down from 9.23% a year earlier. Its return on assets also fell to 0.92% from 1.48% previously. 

Since the start of 2021, the bank grew its asset base by 7.76% to P703.542 billion at the end of June. 

“Our second quarter results reflect continued quarter-on-quarter improvement from the fourth quarter of 2020 despite the challenging pandemic backdrop. Our team is grateful for the recognition of the bank’s unrelenting commitment on delivering BetterBanking to address our clients’ needs,” said Security Bank President and CEO Sanjiv Vohra in a statement Friday. 

Security Bank shares rose P4.50 to P117 on Friday. – Beatrice M. Laforga