Security Bank grew its net profit last year by 11 percent to P8.55 billion, a record high for the bank, as it expanded its interest earnings while treasury gains dwindled.
This translated to a return on equity of 10.37 percent, lower than the 15.17 percent return last year due to the increase in equity following the entry of Japanese banking giant Bank of Tokyo-Mitsubishi as a strategic investor. However, the bank’s capital adequacy ratio rose to 20.53 percent of risk assets from 15.2 percent in the previous year.
Based on Security Bank’s regulatory filing, its net interest income increased by 28.2 percent to P15.9 billion as the bank expanded its loan book by 24 percent to P237.9 billion by scaling up lending to various industries, such as power, infrastructure, wholesale and retail trade, food and agriculture and consumer goods.
The growth in total interest income of 24.4 percent outpaced the 16.5 percent increase in interest expense.
Other income went down to P4.9 billion from P5.91 billion in the previous year due to lower gain on disposal of Investment Securities alongside lower windfall from foreign exchange as well as trading and securities gains.
Service charges, fees and commissions grew by P63.2 million due to higher transaction volumes.
On the funding side, the bank expanded its deposit base by 17.3 percent last year to P289.5 billion.
On the expenditure side, operating expenses—excluding provisions for credit and impairment losses— were 11.4 percent higher at P10.5 billion. Compensation and fringe benefits increased by 19.6 percent.
Provision for credit losses was pegged at P937.5 million, higher than the previous year’s P628.2 million.
Total Assets grew by 34 percent to P532.2 billion. Total equity grew by 11 percent to P53.2 billion on account of net income during the year. —DORIS DUMLAO-ABADILLA