Security Bank H1 net income up 8% at P5.2B

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LISTED banking firm Security Bank Corp. saw its net income increase by 8 percent for the first half of 2017 on the back of higher net interest income during the period.

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Security Bank said its net income amounted to P5.24 billion in the first six months, higher by 8 percent compared with the P4.85 billion registered in the same period last year.

“This result was driven by a 26 percent or P1.9-billion increase in net interest income to P9.3 billion. Non-interest income including trading gains was P2.9 billion, a 15 percent or P0.5 billion decrease,” the company said in a disclosure to the Philippine Stock Exchange.

For the second quarter alone, the bank booked profit of P2.43 billion, up 31 percent from the P1.85 billion profit reported in the same quarter last year. This was driven by a 24 percent rise in net interest income to P4.9 billion.

For the first half, the increase in net interest income was driven by a 27-percent growth in its loan portfolio to P340 billion coupled with a 26-percent growth in deposits to P380 billion.

Low-cost deposits increased 21 percent. Wholesale loans grew 25 percent, of which corporate loan growth was 23 percent and middle market loan growth was 27 percent.

Likewise, consumer loans increased 49 percent. Net interest margin was 3.2 percent in the second quarter of 2017, up from 3.1 percent in the first quarter of 2017. Service charges, fees and commissions grew 4 percent to P1.1 billion.

Operating expenses, which include provisions for probable credit losses and impairments, was up 16 percent, driven by manpower cost growth of 23 percent as new branches, retail-lending, and e-commerce platforms were staffed.

In the 12 months to June 2017, the company said it opened 25 new branches, bringing the number of branches to a total of 296 to date, with 667 automated teller machines.

It said information technology, both hardware and software, and branch network expansion costs were reflected in the 44 percent increase in depreciation and amortization and software costs.

“Security Bank is in the midst of upgrading its core banking systems to enable the bank to roll out new products and services. The cost-to-income ratio was 49 percent,” it said.

The company’s asset quality remained healthy with net non-performing loan (NPL) ratio of 0.10 percent versus 0.14 percent in the first quarter of 2017. NPL reserve cover was 220 percent versus 197 percent in the previous quarter.

Security Bank’s total assets increased 26 percent year-on-year to P775 billion.

Shareholders’ capital was at P101 billion, up 7 percent. Return on shareholders’ equity (ROE) was 10.6 percent. Common Equity Tier 1 ratio was 16.6 percent and total Capital Adequacy Ratio was 19 percent.

Security Bank is among the five private largest banks in the Philippines.

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