Security Bank profit up 8% in first 6 months

Security Bank Corp. posted an 8-percent year-on-year profit growth in the first semester to P5.2 billion on the back of a double-digit expansion in core lending activities.

For the second quarter alone, net profit surged by 32 percent year-on-year to P2.43 billion, the bank disclosed to the Philippine Stock Exchange yesterday.

The growth in six-month earnings was driven by a 26-percent expansion in net interest income to P9.3 billion while non-interest income, including trading gains, fell by 15 percent year-on-year to P2.9 billion.

In the second quarter, growth in earnings was underpinned by a 24-percent rise in net interest income to P4.9 billion.

In the first half, the increase in net interest income was driven by a 27-percent growth in the loan book to P340 billion.

The expansion in risk assets was funded by a 26-percent growth in deposits to P380 billion. Low-cost deposits increased by 21 percent year-on-year in the first semester.

Wholesale lending grew by 25 percent, of which top-tier corporate loan growth was 23 percent while middle market loan growth was 27 percent. Consumer loans rose 49 percent.

Net interest margin improved to 3.2 percent in the second quarter from 3.1 percent in the first quarter.

On non-interest earnings, service charges, fees and commissions grew by 4 percent to P1.1 billion.
Operating expense, excluding provisions for probable credit losses and impairments, was up by 16 percent. This was driven by manpower cost growth of 23 percent as new branches, retail lending and e-commerce platforms were rolled out.

Security Bank said it was in the midst of upgrading its core banking systems to be able to roll out new products and services.

As a measure of efficiency, the bank spent 49 centavos to earn every peso in its books.

Its net non-performing loan ratio (NPL) was at 0.10 percent of total loans. NPL reserve cover was 220 percent, up from the 197 percent in the previous quarter.

The bank’s total assets rose 26 percent year-on-year to P775 billion. Shareholders’ capital hit P101 billion, up by 7 percent.

Return on shareholders’ equity stood at 10.6 percent.