Security Bank net profit up 21% in 9 months

MANILA, Philippines—Security Bank grew its nine-month net profit by 21 percent year on year to P4 billion on the back of a double-digit rise in interest earnings and loans.

This allowed the bank to maintain a return on equity of 20 percent, a level higher than most of its peers.

In a statement, the bank said the January-to-September profit growth was supported by the 21-percent increase in net interest earnings to P5.5 billion, which was fueled by the 23-percent rise in customer loans to P84.5 billion.

The bank said the healthy profit from lending activities was complemented by fee-based income from services and foreign exchange income that expanded by 17 percent. These more than compensated for lower trading gains, the bank added.

Total revenues for the nine-month period amounted to P7.7 billion, 6.2 percent higher than the level a year ago.

On the expenditure side, operating expenses before provisions and impairment losses were steady at P3.3 billion. This translated to a cost-to-income ratio of 42.5 percent, which was lower than most other banks.

The bank ended September with P196.8 billion in resources, expanding its balance sheet by 36.2 percent from a year ago. The increase was due mainly to customer loans and trading and investment securities, the bank said.

In terms of asset quality, its bad loan ratio remained one of the lowest among its peers. Nonperforming loans stood at 0.9 percent of total loans while coverage of soured loans was at 338 percent.

The bank’s capital adequacy ratio (CAR) stood at 18.3 percent of risk assets, suggesting a fundamentally sound capital base allowing for further expansion and growth.