Security Bank nets P10.3B

PHOTO from Security Bank

Local banking giant Security Bank Corp. reported another banner year for 2017, growing its net profit by 20 percent to a record high P10.3 billion.

The increase in profit was driven by a double-digit expansion of interest and non-interest earnings, based on the bank’s disclosure to the Philippine Stock Exchange on Monday.

This full-year performance translated to a return on equity ratio of 10.2 percent while return on average assets stood at 1.5 percent.

Net interest income last year increased by 22.2 percent to P19.4 billion amid a robust expansion in lending activities.

The bank grew its loan book by 28 percent to P369 billion. Wholesale lending expanded by 25 percent, of which corporate loans rose by 25 percent while middle-market loans increased by 24 percent. Consumer loans expanded at a much faster pace of 49 percent.

By loan portfolio, consumer lending – or those lent to households such as to purchase cars or houses or to individuals using their credit cards- accounted for 16 percent, up from 13 percent in the previous year. The bank unveiled a strategy to aggressively grow its retail banking footprint in 2015.

Overall, the bank’s net interest margin improved to 3.3 percent in the fourth quarter from 3.2 percent in the previous year and 3.1 percent a year ago.

Security Bank’s non-interest income expanded by 15 percent to P5.7 billion. Trading gains surged by 36 percent to P2.4 billion while service charges, fees and commissions increased by 3 percent to P2.2 billion.

On the funding side, deposits grew by 19 percent, with low-cost deposits rising by 18 percent.

In terms of asset quality, bad loans were at a meager 0.02 percent of total loans at end-2017, further improving from 0.11 percent as of third quarter 2017.

The bank set aside P656 million in provisions for credit losses during the year. For every P1 of bad loans, the bank has put in place a buffer of P2.39 at end-2017.

As a measure of efficiency, the bank spent 49.8 centavos to earn every peso. Excluding provisions for credit and impairment losses, operating expenses grew by 19 percent due to higher gross receipt taxes, a 14-percent growth in manpower cost and a 48-percent increase in depreciation, amortization and software costs.

In the past few years, the bank has been supporting the growth of its retail banking and core businesses by investing in manpower, digital platform, major IT upgrade and the opening of new branches last year.

Security Bank ended last year with 303 branches and 713 automated teller machines.

Total resources rose by 9 percent to P756 billion. Shareholders’ capital stood at P105 billion, up by 8 percent. In 2016, The Bank of Tokyo-Mitsubishi UFJ Ltd. infused P37 billion in fresh capital to the bank in exchange for a 20-percent stake in Security Bank.