Security Bank Corp. saw a 4 percent growth in its first half net income, reflecting higher net interest profit.
In a statement on Monday, Security Bank said it posted P4.9 billion in net income in the first half of 2016, a 4 percent rise from the P3.5 billion a year earlier.
The bank said it was driven by a 28 percent growth in net interest income equivalent to a P1.6 billion increase, offsetting a P1.4 billion decrease in securities trading gains from a high of P3 billion in the first half of 2015 to P1.6 billion in the first half of 2016.
For the second quarter alone, its net income grew 42 percent year-on-year to P1.85 billion from P1.3 billion.
This was on the back of a 34 percent year-on-year increase in net interest income to P3.9 billion, a 41 percent rise in service charges, fees and commissions, and a three-fold increase in foreign exchange income, the lender said.
In the first half of 2016, Security Bank explained that the increase in its net interest income to P7.4 billion was spurred by a 29 percent loan growth to Ph268 billion and a 17 percent deposit growth to P301 billion.
Low-cost deposit growth was 23 percent, while corporate/commercial loans jumped 27 percent.
The bank’s key consumer loan portfolios composed of home and auto loans and credit card receivables grew 61 percent.
Its net interest margin improved to 3.2 percent in the second quarter from 3.1 percent the previous quarter.
Service charges, fees and commissions of the lenders rose 25 percent to P1.1 billion, propelled by bancassurance, credit cards, loan fees and advisory, while foreign exchange income increased two-fold to P422 million.
Security Bank’s operating expense growth, excluding provisions for probable credit losses and impairments, was 8 percent, while its cost-to-income ratio was 48 percent.
The Bank provided P408 million in allowance for probable credit losses in the first-half 2016, 4 percent higher than that of the first half of 2015.
Its asset quality remained strong as net non-performing loan ratio (NPL) decreased to 0.27 percent from 0.29 percent the previous quarter. As a result, the bank’s NPL reserve cover increased to 188 percent from 171 percent the previous quarter.
“We are pleased with the quality of our earnings because it is coming from recurring income and core businesses,” Security Bank President and Chief Executive Officer Alfonso Salcedo Jr. said.
Salcedo said growth has been balanced with both wholesale and retail banking registering encouraging results.
With the P37 billion equity investment by The Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU) in Security Bank in April 2016, he said the lender now have P94 billion in capital to fuel its expansion plans.
“Our medium-term objective is to grow our way back to market-leading return on shareholders’ equity (ROE),” he said.