SECURITY Bank Corp. reported a slight drop in net income in the first quarter of this year due to “heavy investments” in branch network, information technology and people, but it remained optimistic on its core business following its system upgrade.
In a disclosure to the Philippine Stock Exchange (PSE) on Tuesday, Security Bank said it posted net income of P2.81 billion in the first three months of the year, down 6.4 percent from the P3 billion recorded in the same quarter last year.
The bank said net interest income increased 27 percent to P4.4 billion from P3.5 billion a year ago, “which more than offset the decrease in non-interest income.”
Non-interest income, including securities trading gains, declined to P1.8 billion from P2.4 billion a year ago.
Its loan book grew 28 percent year-on-year to P305 billion, while wholesale loans increased 26 percent. Consumer loans grew 51 percent, while net interest margin was maintained at 3.1 percent.
The bank said its asset quality remained healthy, with net non-performing loan (NPL) ratio at 0.14 percent, lower than the 0.29 percent recorded a year ago. It said NPL reserve cover remained high at 197 percent versus 171 percent a year ago.
Deposits increased 34 percent to P379 billion, while low-cost deposits grew 19 percent. Its total assets were at
P729 billion, up 41 percent from the same period last year.
The lender said its cost-to-income ratio remained at an efficient 47 percent, while operating expense growth rate, excluding provisions for probable credit losses and impairments, was 18 percent
“We’re pleased with the loan and deposit growth which has sustained net interest income growth. The Bank has been able to manage the cost-to-income ratio in the midst of heavy investments in branch network, information technology and people. These are investments for the future which will allow us to scale up the business,” Security Bank President and Chief Executive Officer Mr. Alfonso Salcedo Jr. said.
Security Bank said it has successfully upgraded its core banking system as part of its technology transformation program. The new system, used by leading financial institutions globally, will enable the bank to roll out new products and services much faster, it said.
On April 25, the company’s Board of Directors approved a cash dividend of P1.50 per share payable on May 25 this year to stockholders of record on May 11.
with ANGELICA BALLESTEROS