Security Bank income rose 17% in 2019
Lender Security Bank Corp. saw a 17-percent growth in net profit last year to P10.1 billion on higher interest income and fee-based income as well as strong trading gains.
For the fourth quarter of 2019 alone, Security Bank’s net profit increased by 16 percent to P2.4 billion, the bank disclosed to the Philippine Stock Exchange on Friday. Quarterly revenues rose by 43 percent year-on-year to P9.8 billion, as driven by core income.
Return on shareholders’ equity for 2019 increased by 80 basis points to 8.9 percent from 8.1 percent in the previous year.
For full-year 2019, net interest income from customer loans grew by 43 percent to P22.5 billion, boosted by the continued growth of retail loans and low-cost deposits.
Retail loans grew by 56 percent for the full year, accounting for 29 percent of total loans versus 20 percent a year ago. Wholesale loans declined by 2 percent, attributed to “tempered loan demand and disciplined pricing.”
The total loan book expanded by 9 percent to P456 billion. Total net interest income increased by 29 percent to P26.8 billion while net interest margin in 2019 improved by 66 basis points to 3.93 percent.
On the funding side, total deposits grew by 2 percent year-on-year to P499.6 billion. During the year, the bank issued a total of P8.37 billion in long-term negotiable certificates of deposits and P18 billion in peso corporate bonds to diversify its funding base, extend its liability tenors and support business expansion.
Service charges, fees and commissions grew revenues by 40 percent to P4.1 billion, driven by credit cards, loan fees, deposit charges and bancassurance, or the cross-selling of insurance products.
Like many of its peers, Security Bank’s results were buoyed by a treasury windfall. Securities trading gains amounted to P1.5 billion, up by 320 percent from the same period the previous year.
Total noninterest income increased by 49 percent to P7.1 billion.
The bank set aside P4.2 billion as provision for credit losses in 2019, an increase from P714 million in 2018, as retail loans and provisions for select commercial sectors grew.
Operating expense was up by 18 percent due to manpower costs. The bank expanded its headcount by 722 primarily to support its growing retail banking business and transformation of its infrastructure, processes and culture. Manpower count now stands at 6,625.
The bank spent 51.1 centavos for every peso earned last year, lower than 53.9 centavos spent in 2018.
As a gauge of asset quality, nonperforming loans in the fourth quarter improved to 1.17 percent vis-a-vis the total loans compared to 1.4 percent in the previous quarter. This bad loan ratio was lower than the industry-wide average of 2.09 percent. —DORIS DUMLAO-ABADILLA
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