Security Bank posts record high earnings

Robust core businesses and lower provision for bad debts pushed the net income of Security Bank Corp. to a record P10.6 billion last year, 53 percent higher than the P6.9 billion recorded in 2021.

Security Bank president and CEO Sanjiv Vohra hopes to sustain the strong performance with the further recovery of the Philippines from the impact of the pandemic.

The listed bank, Vohra said, intends to ramp up engagements with retail and wholesale clients as well as small and medium enterprises (SMEs).

“We are encouraged by the underlying growth of the economy as it reopens and rebuilds. Our strong performance for 2022 reflects the fact that Security Bank is fully engaged to support our retail, wholesale, and SME clients. We will sustain that intensity for 2023 as we help clients navigate the current inflationary environment and geopolitical uncertainties,” Vohra said.

For the fourth quarter alone, the bank reported a slight decline in earnings to P2 billion from P2.1 billion in the same period in 2021 despite the nine-percent rise in revenues to P10.2 billion from P9.3 billion.

For 2022, Security Bank reported an eight-percent increase in total revenues to P39.6 billion.

The bank’s net interest income climbed by seven percent to P29.2 billion despite the lower net interest margin of 4.23 percent in 2022 from 4.43 percent in 2021.

Likewise, its non-interest earnings booked a double-digit 11-percent increase to P10.4 billion as income from service charges, fees and commissions grew by 17 percent to P5.3 billion led by increase in fees from credit cards, deposits and capital markets.

On the other hand, the operating expense of Security Bank inched up by eight percent, driven by investments in manpower and technology.

According to Security Bank, its provision for credit and impairment losses plunged by 46 percent to P2.8 billion last year from P5.3 billion in 2021 as gross non-performing loan (NPL) ratio improved to 2.95 percent from 3.94 percent, while NPL reserve cover increased to 101 percent from 93 percent.

For the fourth quarter, the bank alloted P1.2 billion for credit and impairment losses, the same level in the last quarter of 2021.

Its loan book grew by 12 percent to P503 billion in 2022 from P467 billion in 2021 on the back of a 10-percent increase in wholesale loans as well as a 16-percent jump in retail loans driven by higher home and credit card loans.

The bank’s deposit base rose by 16 percent to P606 billion from P524 billion, driven by increases in lowcost savings and demand deposits.

Its return on assets increased to 1.37 percent from 1.02 percent, while return on shareholders’ equity increased to 8.42 percent from 5.57 percent.

The assets of the 71-year-old bank surged by 20 percent to P842 billion as of end-2022 and continues to be among the country’s best capitalized private domestic universal banks with a common equity tier 1 ratio of 16.1 percent and capital adequacy ratio of 16.6 percent.