Security Bank income grows 66% to ₧2.72B

MID-SIZED lender Security Bank Corp. said its income grew 66 percent during the first quarter of the year to P2.72 billion from last year’s P1.64 billion, driven by growth in core businesses, lower credit provisions and normalized income tax provisions. The company said the 2021 tax provisions were impacted by a onetime charge triggered by the passage of Republic Act (RA) 11534 (Corporate Recovery and Tax Incentives for Enterprises, or CREATE, law).

Net interest income increased 5 percent to P7 billion. Net interest margin was 4.19 percent, slightly down by 2 basis points year-on-year. Total non-interest income rose 8 percent to P2.3 billion. Service charges, fees and commissions grew 22 percent to P1.3 billion, led by increase in fees from deposits, capital market and credit cards.

Other non-interest income excluding securities trading gains and fee income rose 168 percent to P1 billion, driven mainly by recovery on chargedoff assets and foreign exchange income.

Operating expense was 8 percent higher, driven by investments in technology and manpower to improve customer experience.

The cost-to-income ratio was 58.96 percent compared to 57.6 percent a year ago. Pre-provision operating profit was P3.8 billion, up 2 percent year-on-year.

The bank said it set aside P80 million as provisions for credit losses for the quarter, lower than last year’s P402 million. Gross non-performing loan ratio decreased to 3.65 percent from 3.94 percent in previous quarter. NPL reserve cover was at 90 percent.

The shares of Security Bank closed at P92.70, up by P3.70 from the previous close.

“Despite the Omicron impact in January, we are pleased with the improvement in client activity levels for the first quarter, particularly for our corporate and home loans teams,” Security Bank president and CEO Sanjiv Vohra said. “Various macro factors are unfolding in the coming months including: new government policy, the war in Ukraine, and central bank action on inflation, we are constructively engaged with our clients to help them navigate the current environment.”

Security Bank continues to be among the country’s best capitalized private domestic universal banks. Common Equity Tier 1 Ratio was 18.1 percent and total capital adequacy ratio was 18.6 percent. Total assets stood at P707 billion, while shareholders’ capital was at P122.5 billion, up 1 percent.