Security Bank posts 22% ROE

Security Bank Corp. reported a 22-percent return on shareholders’ equity (ROE) for the first quarter this year with a net income of P3 billion.

This is so far the highest ROE registered by private domestic universal banks that had disclosed their first quarter financial results and whose ROEs ranged from 10 percent to 13 percent.

From 2007 to the first quarter of this year, SECB ranked first in terms of ROE among private domestic universal banks in the country, except in 2013 when it made significant investment in branch expansion to grow its retail banking business.

SECB’s first quarter profit was computed before the P36.9-billion capital investment by The Bank of Tokyo-Mitsubishi UFJ Ltd. (BTMU) in the bank on April 1, 2016.

Loans rose by 20 percent year-on-year to P239 billion. Deposits grew by 14 percent to P282 billion, with low-cost deposits increasing 18 percent. Corporate/commercial loans advanced by 18 percent. Key consumer loan portfolios composed of home and auto loans and credit card receivables rose by 62 percent. Consumer loans as a percentage of total loans moved up to 11 percent in the first quarter from 7 percent a year ago. Its net non-performing loan (NPL) ratio was only 0.29 percent. Total assets was P516 billion, up 26 percent from a year ago. Return on assets was 2.3 percent.

Net interest income was up by 21 percent year-on-year to P3.5 billion. The overall net interest margin was 3.1 percent, lower than the 3.3 percent average in 2015. Net interest margin on loans was up to 3.8 percent in the first quarter from 3.7 percent in 2015.

Non-interest income amounted to P2.4 billion. The bank earned P1.4 billion in extraordinary trading gain from investment securities, lower than the P2.1 billion a year ago. Due to the lower extraordinary trading gain, net income in the first quarter this year went down to P3 billion from P3.36 billion in the same quarter last year.