Security Bank Corp. said net profit declined 7.2% in 2021 to P6.9 billion as net interest income fell and expenses rose, while loan-loss provisions narrowed sharply. 

In a disclosure to the bourse Friday, the bank said fourth-quarter net profit was up 171% at P2.1 billion as the economy opened up.  

“Our fourth quarter results benefitted from the easing of mobility restrictions and the resulting uplift of the economy. We are optimistic about economic activity in 2022, despite the Omicron impact in January,” Security Bank President and Chief Executive Officer Sanjiv Vohra said.  

Net interest income declined 10% to P27.5 billion in 2021, with the net interest margin – the difference between what it earns in interest from loans and what it pays out to depositors – dropped 27 basis points to 4.43%. 

Non-interest income dropped 53% to P9.4 billion, with the bank adding that 2020 results benefited from “extraordinary securities trading gains.” In 2021, service charges, fees and commissions rose 25.4% to P4.5 billion, while trading gains increased 34% to P3.7 billion. 

Operating expenses rose 8% from a year earlier, as the bank upgraded technology and personnel. This brought the cost-to-income ratio to 57.8%. 

The bank set aside P1.2 billion in provisions for potential loan losses in the fourth quarter. This brought loan loss provisions to P5.3 billion in 2021, much lower than the P26.4 billion set aside in 2020. 

Security Bank’s gross loan portfolio rose 1% year-on-year to P467 billion at the end of 2021.  

Retail loans, which accounted for a quarter of the loan book, declined 9% in 2021. Wholesale loans rose 5%. 

At the end of 2021, the gross non-performing loan (NPL) ratio stood at 3.94%, while the NPL reserve cover was 93%. 

Total deposits rose 19% year-on-year to P524 billion. Low-cost savings and demand deposits, which accounted for 61% of the total, grew 19%. High-cost deposits rose 18%. 

Total assets grew 7% year-on-year to P700 billion, while shareholders’ capital rose 1% to P125 billion. 

The bank’s capital adequacy ratio was 19.8%, while common Equity Tier 1 ratio was 19.1%. Both are above minimum regulatory requirements. 

In 2021, the return on shareholders’ equity was 5.57%. 

Security Bank shares closed at P113 Friday, down 80 centavos or 0.7%. – Luz Wendy T. Noble