MANILA, Philippines–Security Bank has reported a 66-percent decline in first semester net profit to P1.7 billion compared to the level in the same period last year when earnings were boosted by extraordinary trading gains.
But Security Bank president Alberto Villarosa said the bank was focused on growing its core business founded on solid balance sheet, noting that core revenues had risen by 6 percent year-on-year to P5.3 billion in the first semester.
“Our bottom-line in the first half of this year reflected the non-recurrence of a large non-core income from sale of investment securities that we had in the same period of last year, the margin squeeze, and our investing for the future to grow core recurring revenues and add new ones,” Villarosa said in a press statement.
Net interest income was steady at P4 billion as net interest margin declined to 3.5 percent compared to 4 percent in the prior year period, reflecting the country’s highly liquid financial system that in turn resulted in cutthroat competition among lenders. Volume growth, however, compensated for the margin squeeze.
Loans grew by 21 percent year-on-year to P133 billion as the bank supported power, utilities, infrastructure, wholesale and retail trade, food and agriculture, consumer goods and other key sectors of the economy.
Non-interest income declined to P1.3 billion compared to P4.2 billion a year ago, due to a lower securities trading gain of P279 million versus the P3.2 billion in prior year period. Unlike most of its peers which booked hefty trading gains this year, Security Bank locked up gains from investment securities last year, citing the need to fund its growing lending business.