SECURITY BANK Corp. posted a lower net income in the first quarter due to lower trading gains and higher provision for income tax.
In a disclosure yesterday, Security Bank said its net income stood at P2.35 billion in the January-March period, 16.6% lower than the P2.82 billion it booked in the same period last year.
The lender said it recorded lower profits last quarter as trading gains decreased to P416 million by half and as provision for income tax rose by P311 million in a comparable year-ago period.
Although it recorded a lower bottom line last quarter, Security Bank noted that its underlying customer business remained strong, with net interest income growing 13% to P5 billion. Specifically, net interest income from customer loans and deposits increased by 43% to P3.6 billion.
Service charges, fees and commissions rose 45% to P683 million led by bancassurance, credit card and loan fees.
However, interest income from financial investments declined “as the bank reduced its securities portfolio by 11% year-on-year through securities sale.”
Total loans grew 20% year-on-year to P367 billion. Security Bank’s consumer loans, which comprised 17% of the lender’s loan portfolio, accelerated 54% in the said period. Its corporate and middle market lending businesses, on the other hand, also grew 16% and 13%, respectively.
With the rollout of its small business and personal loans in early 2017, Security Bank now has a complete set of consumer loans, in addition to home, car as well as credit card loans. The lender said this help its net interest margin be sustained at 3.3% last quarter from the 3.1% margin logged in the first three months of 2017.
Deposits went up 11% to P420 billion, while low-cost deposits rose 20%. Core revenues, which are made up of net interest income, fee-based income, and trading gains attributable to customer flows, were up 15% or P797 million.
Overall, Security Bank’s total assets stood at P703 billion.
“Asset quality remained healthy, with gross non-performing loan (NPL) ratio at 0.7%, lower than the 0.9% a year ago and same level as quarter ago,” the lender told the Philippine Stock Exchange.
The bank’s net NPL ratio was 0.27%, while the NPL reserve cover increased to 269%.
Cost-to-income ratio was 53%. Excluding provisions for credit and impairment losses, the bank’s operating expense growth was at 14% last quarter.
In terms of capital, Security Bank said its position strengthened in the January-March period, with common equity Tier 1 ratio at 16.5%, and total capital adequacy ratio at 18.8%, an improvement from the 15.5% and 17.7% seen in the previous quarter, respectively.
Meanwhile, the lender announced that it raised P5.781 billion from the second tranche of its P20-billion long-term negotiable certificates of deposit program. It originally looked to raise P5 billion.
The principal offer of the long-term note program was conducted in November last year, which raised P8.6 billion.
Security Bank shares lost P1.40 or 0.67% to close Wednesday’s trading at P207.60 apiece. — K.A.N. Vidal