Security Bank reports 13.4% decline in profit at ₱2.4 B

Security Bank Corporation reported a 13.4 percent decline in net profit to ₱2.4 billion in the first quarter of 2023 from ₱2.7 billion in the same period last year.

In a disclosure to the Philippine Stock Exchange, the firm said that, on a sequential quarter-on-quarter basis, net profit increased 18 percent.

Net interest margin increased to 4.06 percent, up by 14 basis points versus previous quarter. Net interest income likewise increased 3 percent quarter-on-quarter.

On a year-on-year basis, total revenues grew 6 percent to ₱9.8 billion in the first quarter from ₱9.3 billion in the same period last year.

Net interest income increased 7 percent to ₱7.5 billion while total non-interest income was up 2 percent yearon-year to ₱2.3 billion. Non-interest income was driven by service charges, fees and commissions, which was up 2 percent year-on-year.

Operating expense was 12 percent higher versus year-ago level, driven by investments in manpower and technology.

Pre-provision operating profit was ₱3.7 billion. The Bank set aside ₱616 million as provisions for credit losses in the first quarter of 2023.

Gross non-performing loan ratio was at 3.12 percent, down from 3.65 percent a year ago, and was also lower versus previous quarter by 1 percent. NPL reserve cover was at 99 percent, up from 90 percent a year ago.

Total deposits stood at ₱525 billion. Low-cost savings and demand deposits as percent of total deposit increased to 62 percent from 58 percent in previous quarter.

The bank shed high-cost deposits, resulting in time deposits decreasing 3 percent year-on-year and 28 percent quarter-on-quarter.

Net loans increased 5 percent year-on-year to ₱489 billion, driven by retail loans which grew 18 percent and wholesale loans which was up 1 percent.

Home loans grew 18 percent and credit cards increased 36 percent yearon-year. Retail loans are 26 percent of total loans, up from 23 percent a year ago.

On a sequential quarter-on-quarter basis, net loans decreased by 3 percent. Retail loans increased 4 percent while wholesale loans decreased 5 percent over the quarter.

The bank continues to have healthy liquidity, with Liquidity Coverage Ratio (LCR) of 167 percent and Net Stable Funding Ratio (NSFR) of 127 percent as of March 31, 2023.

"With the prudent growth in our core businesses in Q1-2023, our balance sheet remains strong, anchored on our strong capital,” said Security Bank President and CEO Sanjiv Vohra.