Security Bank posts P4.3B profit in 1H

Security Bank Corporation posted P4.3 billion in net income in the first half of 2018.

This is 18 percent (%) or P951 million lower than year-ago level primarily due to the decrease in trading gains by 59% or P655 million and the increase in provision for income tax by 55% or P424 million.

Loans grew 12% year-on-year while deposits increased 17%. Net interest income from customer loans and deposits increased by 34% or P1.8 billion to P7.4 billion. Interest income from financial investments decreased by 13% or P717 million to P4.8 billion on lower securities portfolio which likewise dropped by 13% yearon-year. As such, total net interest income grew by 8% to P10 billion. Service charges, fees, and commissions increased by 16% to P1.3 billion. The growth in fee income was broad-based, led by bancassurance, credit card, and loan fees.

Deposit growth accelerated to 17%, increasing by P63 billion from year-ago level to reach P443 billion as of June 30, 2018. Low-cost deposits increased by 15%. The loan-to-deposit ratio improved to 86% from 90% a year ago.

Loans grew 12% to P383 billion as of June 30, 2018 after a strong 27% increase a year ago in first half 2017. Wholesale loans grew 7%. Consumer loans continued their strong growth trajectory at 50%. Consumer loans now account for 18% of total loan portfolio. Net interest spread on loans and deposits was 4.27% in second quarter of 2018, up 7 basis points quarter-on-quarter and 39 basis points year-on-year.

Asset quality remained healthy, with gross non-performing loan (NPL) ratio down to 0.6% from 0.7% a year ago. Provision for credit losses was P90 million in second quarter of 2018. The NPL reserve cover was at 261%, the highest in the industry.

Cost-to-income ratio was 54.6%. Operating expense growth was 12.9%, excluding provisions for credit and impairment losses, driven by the Bank’s investment in digitalization and information technology transformation. /