Se­cu­rity Bank posts net in­come of P8.6-B in 2018

Sun.Star Pampanga - - BUSINESS! - The Bank has been op­er­at­ing for 67 years since it was es­tab­lished in 1951. More in­for­ma­tion is avail­able on our web­site:­cu­ri­ty­

Se­cu­rity Bank Cor­po­ra­tion (PSE: SECB) posted P8.6 bil­lion in net in­come in 2018. A key com­po­nent of the Bank’s earn­ings is net in­ter­est in­come from cus­tomer loans and de­posits, which in­creased by 30% or Php 3.6 bil­lion to P15.7 bil­lion. This was driven by the con­tin­ued ex­pan­sion of con­sumer loans and low-cost de­posits. Con­sumer loans grew 47% while low-cost de­posits in­creased 15%. Con­sumer loans now ac­count for 20% of to­tal loans ver­sus 16% a year ago.

To­tal loans in­creased 12% to P416 bil­lion. Whole­sale loan growth was 7%. To­tal de­posits in­creased 18% to P489 bil­lion. The Bank’s in­ter­est mar­gins con­tin­ued to im­prove. Net in­ter­est spread on loans and de­posits fur­ther in­creased to 4.72% in Q4-2018, up by 29 ba­sis points quar­ter-on-quar­ter and up by 48 ba­sis points year-on-year.

In­ter­est in­come from fi­nan­cial in­vest­ments was lower by 11% or P1.2 bil­lion mainly due to a lower level of in­vest­ment se­cu­ri­ties at amor­tized cost. To­tal net in­ter­est in­come grew by 7% to P20.8 bil­lion. Over­all, net in­ter­est mar­gin fur­ther im­proved to 3.4% in Q4-2018, up by 10 ba­sis points quar­ter-on-quar­ter and up by 13 ba­sis points year-on-year.

Ser­vice charges, fees and com­mis­sions in­creased by 26% to P2.9 bil­lion. This was driven by credit card, ban­cas­sur­ance, loan fees and de­posit charges.

The de­crease in trad­ing gains by 85% or P2 bil­lion and the in­crease in pro­vi­sion for in­come tax by 47% or P790 mil­lion pri­mar­ily ac­counted for the Bank’s lower net in­come in 2018. Net in­come was lower by 16% or Php 1.7 bil­lion ver­sus pre­vi­ous year.

Op­er­at­ing ex­pense growth was 10% (ex­clud­ing pro­vi­sions for credit and im­pair­ment losses). Cost-to-in­come ra­tio was 53.9%.

As­set qual­ity re­mained healthy, with gross non-per­form­ing loan (NPL) ra­tio at 0.7%. Pro­vi­sion for credit losses was P714 mil­lion. NPL re­serve cover was 112%, com­puted us­ing the new BSP Cir­cu­lar 1011 guide­lines on loan loss pro­vi­sions which the Bank adopted in Septem­ber 2018.

Se­cu­rity Bank con­tin­ues to be among the coun­try’s best cap­i­tal­ized pri­vate do­mes­tic univer­sal banks. Com­mon Eq­uity Tier 1 Ra­tio in­creased to 16.4% from 15.5% a year ago. To­tal Cap­i­tal Ad­e­quacy Ra­tio like­wise in­creased to 18.7% from 17.7%. Re­turn on share­hold­ers’ eq­uity was 8.1%. Share­hold­ers’ cap­i­tal in­creased to P109 bil­lion, up 4% year-on-year. To­tal as­sets stood at P767 bil­lion, up 10%.

Se­cu­rity Bank has a to­tal of 305 branches and 760 ATMs as of De­cem­ber 31, 2018.

Se­cu­rity Bank is among the six largest pri­vate do­mes­tic univer­sal banks in the Philip­pines by to­tal as­sets (at P767 bil­lion) as of De­cem­ber 31, 2018.

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