Security Bank nets P7.4B

Lender Security Bank grew its net profit in the first nine months by 12 percent year-on-year to P7.4 billion due to a double-digit expansion in interest earnings.

For the third quarter alone, the bank’s net profit increased by 21 percent year-on-year to P2.14 billion, driven by a 22-percent expansion in net interest earnings to P5 billion.

For the nine-month period, the bank’s net interest income rose by 24 percent year-on-year to P14.3 billion. Non-interest income, including trading gains, declined by 15 percent to P3.5 billion.

In a press statement, Security Bank said the growth in its net interest income was on the back of a 38-percent year-on-year increase in loans to P370 billion and a 44-percent increase in deposits to P431 billion. Low-cost deposits grew by 22 percent.

On its earning assets, wholesale loans grew by 36 percent. Lending to top-tier corporations increased by 39 percent while lending to the middle market rose by 32 percent.

On the other hand, consumer loans increased by 67 percent. This segment accounted for 14 percent of total loans.

Net interest margin was stable at 3.2 percent in the third quarter versus the previous quarter. This slightly improved from the margin of 3.1 percent at year-end 2016.

Meanwhile, service charges, fees and commissions were up by 2 percent to P1.6 billion.

Operating expenses – excluding provisions for credit and impairment losses – were up by 17 percent. This was driven by a 22-percent increase in manpower cost with the staffing of new branches, retail lending and e-commerce platforms.

The bank opened 19 new branches in the last 12 months from October 2016 to September 2017, inclusive of eight new branches opened in the first nine months of this year.

Depreciation and amortization and software costs increased by 40 percent due to the major information technology upgrade and branch network expansion.

The bank spent 50.6 centavos to earn every P1 booked for the period.

On asset quality, non-performing loan ratio (NPL) stood at 0.11 percent. NPL reserve cover was 220 percent.

Total assets increased by 17 percent to P796 billion. Shareholders’ capital rose by 8 percent year-on-year to P103 billion.

Return on average shareholders’ equity (ROE) was 9.8 percent while return on average assets was 1.5 percent.