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Security Bank posts higher Q1 earnings

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Security Bank

SECURITY BANK Corp. recorded slightly higher net income in the first quarter on the back of growth across its core businesses.

In a regulatory filing on Monday, the listed lender said it posted a P2.38-billion net income in the first three months of the year, 1.5% higher than the P2.35 billion recorded in the same period last year.

Net interest income grew 15% to P5.8 billion in the January-March period from P5 billion last year.

Total loans stood at P412 billion, up 12% from P367 billion in the first quarter of 2017, with retail loans growing 49% year-on-year. Currently, retail lending accounts for 23% of the bank’s total loan book, up from a 17% share a year ago.

On the funding side, total deposits increased 10% to P461 billion, as low-cost deposits grew 11% from the comparative year-ago period.

These resulted in a net interest income from consumer loans and deposits worth P4.7 billion, up 29% from the same period a year ago.




Meanwhile, non-interest income also grew 39% year-on-year to P1.8 billion in the first quarter. Service charges, fees and commissions stood at P857 million, 26% higher compared with P683 million a year ago, driven by credit cards, loan fees, bancassurance, deposit charges and stock brokerage.

Security trading gains amounted to P671 million in the first three months, up from the P416 million recorded in the same period in 2017.

Total revenues reached P7.6 billion in the first quarter, climbing 20% year-on-year.

Cost-to-income ratio improved a tad to 53.7% in the period from 53.9% in 2018 despite the 22% growth in operating expenses year-on-year.

Security Bank’s expense growth was mainly driven by gross receipts and documentary stamp taxes and manpower costs.

Overall, the lender’s total assets reached P763 billion as of the first quarter, up 9% from P703 billion in 2018.

Asset quality remained healthy, with gross non-performing loan (NPL) ratio at 0.75%, while NPL reserve cover increased to 186% from 111% a quarter ago. The bank set aside P295 million for provisions for credit losses.

Shareholder’s capital was at P111 billion, with total capital adequacy ratio and common equity Tier 1 ratio standing at 16.5% and 19%, respectively. Return on shareholders’ equity was at 8.6%.

The bank expects its loan portfolio to grow by mid-teens this year at 13-15% driven by robust expansion of its retail lending book.

Security Bank shares closed at P180 each on Monday, dropping P1.20 or 0.66% from its previous finish. — Karl Angelo N. Vidal