Security Bank net profit up 20% to P10.3 billion

SECURITY BANK Corp. posted a higher net income in 2017 driven by growth across its business segments.

In a disclosure to the local bourse on Monday, Security Bank said its net income grew by 20% to a “record high” P10.3 billion last year from P8.55 billion posted in 2016.

The profit growth was mainly attributed to the 22% increase in the bank’s net interest income to P19.4 billion from the P15.9 billion in the comparable year-ago period, as well as the 15% growth in its non- interest income to P5.7 billion.

Trading gains went up 36% to P2.4 billion, while service charges, fees and commission income grew 3% to P2.2 billion.

This brought Security Bank’s total revenues to P25.1 billion in 2017, up 20%.

For the fourth quarter alone last year, Security Bank booked a P2.9-billion net income, a 49% increase from the same period in 2016. The bank said this increase was driven by the 16% growth in its net interest income to P5 billion and gain on sale of securities of P1.3 billion.

The lender’s loans grew 28% to P369 billion in 2017. Wholesale loans booked a 25% growth, broken down into corporate loans, which climbed 25%, and a middle market loan growth of 24%.

Consumer loans also grew 19%, accounting for 16% of the bank’s total loans from the 13% in 2016.

Deposits were also up 19% last year, with low-cost deposits growing 18%, Security Bank said.

“Net interest margin improved to 3.3% in the fourth quarter of 2017 from 3.2% of previous quarter and 3.1% a year ago,” the lender added.

Still, the asset quality of the bank remained healthy, with its net non-performing loan (NPL) ratio at 0.02% at end-2017 from 0.11% at the end of third quarter last year.

Provisions for credit losses in 2017 stood at P656 million, while the bank’s NPL reserve cover rose to 239% at end-December from 220% in the previous quarter.

Security Bank’s cost- to- income ratio was at 49.8%. Operating expense growth, excluding provisions for credit and impair-

ment losses, stood at 19% due to higher gross receipt taxes, a 14% growth in manpower cost and 48% growth in depreciation, amortization and software costs.

As of end-2017, Security Bank had 303 branches and 713 automated teller machines.

Total assets grew 9% to P756 billion. Capital adequacy ratios were also healthy, with its common equity ratio and total capital adequacy ratio at 15.5% and 17.7%, respectively.

Shareholders’ capital rose by 8% to P105 billion. Return on average shareholders’ equity was 10.2, while return on average assets was at 1.5%.

Security Bank’s shares closed Monday’s session at P 238 apiece, dropping P5.40 or 2.22% from Friday’s P243.40 each.