SECURITY Bank Corp. reported a record net income of P8.55 billion in 2016, up 11 percent from the previous year driven by strong growth in core recurring income.
In a disclosure to the Philippine Stock Exchange (PSE) on Wednesday, Security Bank said its net interest income increased 28 percent to P15.9 billion, which more than offset the P1.1 billion decrease in trading gains.
Gains on the sale of securities were lower at P1.8 billion from P2.9 billion in 2015. Net interest margin was steady at 3.1 percent.
“We are pleased with the quality of our earnings. Our 2016 results show steady progress in our core recurring income. The growth in our net interest income more than offset the lower trading gains,” Security Bank President and Chief Executive Officer Alfonso Salcedo Jr. said.
“Our loans and deposits are growing robustly. Our asset quality and cost-to-income are in good shape. We continue to invest in growing the business,” he said.
Total loans and investments in corporate bonds increased 25 percent to P317 billion, with corporate, commercial and retail customer loans increasing 20 percent to P289 billion. Deposits grew 20 percent to P347billion, with low-cost deposits increasing 2 percent.
The bank added that loan growth continued its trajectory by segment with corporate and commercial loans growing 20 percent and total consumer loans increasing 56 percent.
It said credit card receivables decreased by 5 percent due to the sale of the Diners Club franchise. It added that retail loans accounted for 13 percent of total loan portfolio, up from 10 percent in 2015.
The bank’s total assets increased 31 percent to P695 billion. Security Bank said its asset quality remained healthy, with net non-performing loan (NPL) ratio at 0.44 percent, which is among the lowest in the industry.
Gross NPL ratio was 0.8 percent, same as in 2015. NPL reserve cover stood at 170 percent.
Notwithstanding the healthy asset quality, Security Bank said it increased its provision for probable credit losses by 52 percent to P953 million.
The bank added that its cost-to-income ratio was 50 percent, while operating expense growth (excluding provisions for probable credit losses and impairments) was 11 percent as the bank continued to invest in scalability of its business, making major investments in information technology, people and branches.
For the fourth quarter of 2016 alone, Security Bank said its net income increased 18 percent year-on-year to P1.9 billion, driven by a 30 percent increase in net interest income to P4.4 billion.
It also noted that the growth in net interest income has accelerated to 30 percent year-on-year in the fourth quarter from 28 percent in previous quarters.