Home Banking & Finance Security Bank posts higher earnings

Security Bank posts higher earnings

SECURITY BANK Corp. recorded a higher net income in the second quarter on the improved performance of its core businesses and lower credit provisions.

The bank booked an attributable net income of P3.52 billion in the second quarter, up by 139.4% from the P1.47 billion in the same period in 2021, according to its quarterly report disclosed to the stock exchange on Monday.

This brought its attributable net profit for the first half to P6.25 billion, more than double the P3.12 billion seen in the comparable year-ago period, amid growth across the lender’s core businesses.

The bank said in a statement that its pre-provision operating profit in the first semester was at P8.5 billion, 6% higher year-on-year. The lender set aside P408 million in provisions for credit losses.

Security Bank’s first semester performance translated to a return on average common equity of 10%, up from 5.05% the year prior, and a return on average assets of 1.70%, also better than the 0.92% seen in the first half of 2021.

“We are very pleased by the continued improvement in our core businesses. Our growth in loans and investment securities, is a tangible manifestation of our commitment to clients to support the reopening of the economy and address the impact of inflation,” Security Bank President and Chief Executive Officer Sanjiv Vohra said in a statement.

The bank’s net interest income increased by 8.1% to P7.48 billion in the second quarter from P6.92 billion a year prior, even as its net interest margin slipped by 6 basis points year on year to 4.30%.

Meanwhile, non-interest income rose by 7% to P2.47 billion in the April to June period. Earnings from fees, service charges and commissions increased by 22% to P1.32 billion, while other income excluding securities trading gains and fee income rose by 17% to P1.2 billion.

Security Bank’s operating expenses went down by 23% to P5.61 billion in the second quarter from P7.32 billion a year earlier.

Its cost-to-income ratio decreased to 55.90% from 56.43% a year prior.

The bank’s gross loans rose by 15% to P490 billion, driven by an 18% increase in wholesale loans and a 6% growth in retail loans. Retail loans made up 23% of Security Bank’s total loans, down from 26% a year ago.

Its nonperforming loan (NPL) ratio declined to 1.32% as of June from 1.47% as of end-December, while NPL reserve cover stood at 91.98%.

Total assets increased by 9% to P766 billion as of June, while shareholders’ capital was at P124 billion.

Security Bank’s common equity Tier 1 ratio was at 16.7% and total capital adequacy ratio stood at 17.2%, both above the minimum regulatory requirements.

The lender’s shares closed at P87 apiece on Monday, up by 1.05% or 90 centavos from the previous finish. — Keisha B. Ta-asan