Security Bank profit dips to P9B in 2023

SECURITY Bank Corp. on Thursday reported a 2023 net income of P9.1 billion, down 14 percent from the previous year’s P10.6 billion, as higher operating expenses weighed on its bottom line.

Total revenues, on the other hand, rose 8.0 percent year on year to P43 billion, the bank said in a statement.

Net interest income expanded by 19 percent to P34.7 billion, while total noninterest income reached P8.2 billion. Net interest margin was up 4.49 percent from 4.23 percent in 2022.

Service charges, fees and commissions rose 15 percent to P6.1 billion, the bank said, fueled by higher fees from credit cards, remittances and bancassurance.

Operating expenses widened by 14 percent last year due to manpower and infotech investments, translating to a cost-to-income ratio of 60.8 percent — higher than 2022’s 57.8 percent.

For the fourth quarter alone, net income amounted to P1.5 billion, while revenues improved 15 percent year on year to P11.8 billion, thanks to a 38-percent increase in net interest income to P10 billion.

Security Bank said its balance sheet remained strong, with current account savings account (CASA) deposits up 4.0 percent year on year in 2023. CASA now accounts for 60 percent of total deposits, which amounted to P607 billion at the end of 2023.

Net loans climbed 7.0 percent to P538 billion, driven by increased loans for retail and micro, small and medium enterprise segments.

“Our growth for 2023 in both loans and deposits was evident across our retail and SME segments,” the bank’s president and chief executive officer, Sanjiv Vohra, said.

“In turn, our wholesale teams successfully secured key mandates to support client growth initiatives. We will accelerate that growth in 2024 and continue to deliver on our transformation goals,” he added.

The bank ended 2023 with a gross nonperforming loan (NPL) ratio of 3.36 percent and an NPL reserve cover of 82 percent.

It also maintained “healthy liquidity,” with a liquidity coverage ratio of 158 percent and a net stable funding ratio of 131 percent.

The bank’s common equity tier 1 ratio and total capital adequacy ratio settled at 15.3 percent and 16.2 percent, respectively.