SECURITY Bank grew its first semester net profit by 29 percent year-on-year to about P4.66 billion as extraordinary trading gains added to stable earnings from core businesses.
This translated to an annualized return on equity of 19 percent, the bank told the Philippine Stock Exchange on Wednesday.
On core business, the bank expanded its loan book by 20 percent year-on-year to P207 billion, which was supported by an 18-percent growth in deposit base to P257 billion.
Loan-to-deposit ratio stood at 81 percent as the bank converted more of its deposits into earning assets. Loan growth was broad-based, with corporate and commercial loans rising by 18 percent and consumer lending surging by 90 percent, the bank said. In recent years, Security Bank has sought to boost consumer lending as a new source of growth.
Six-month net interest income was flat at P5.8 billion versus the level in the previous year. While total interest income expanded by 11 percent, interest expense grew at a faster pace of 46 percent year-on-year. Net margin for the semester slightly narrowed to 3.2 percent compared to the 3.4 percent average in the same period last year.
Non-interest income for the first semester rose by 69 percent year-on-year to P4.4 billion, which included an extraordinary trading gain of P2.1 billion. Excluding such extraordinary gain, non-interest income went up by 58 percent year-on-year to P2.3 billion. Meanwhile, fee-based income inclusive of asset management was 11 percent higher year-on-year at P947 million.
For the second quarter alone, the bank’s net profit eased by 40 percent year-on-year to P1.3 billion. Net interest income during the quarter was P2.9 billion, about 4 percent lower than the level in the same period last year but up by 1 percent quarter-on-quarter.
Non-interest income for the second quarter alone was P998 million, which included trading gains of P315 million from trading portfolio and customer flows business.
Security Bank president and chief executive officer Alfonso Salcedo Jr. said: “We are focused on the execution of our strategy aimed at growing our retail banking business into a strong third pillar complementing our strengths in wholesale banking and financial markets businesses. Retail banking is a steady-growth, sustainable and higher margin business which is less volatile than cyclical businesses.”