Security Bank profit up 14% despite larger bad loan buffer

Security Bank Corp. remained profitable through the first semester, despite the unfolding health crisis and significantly higher provisioning for potential business losses.

Security Bank said in a stock exchange filing on Thursday that net income from January to June hit P5.7 billion, up 14 percent from the same period last year. It added total revenues went up 68 percent to 25.9 billion.

This was due to a combination of net interest income growth and more opportunistic trading gains. Security Bank noted that even without trading gains, revenues were still up 30 percent.

Amid the economic slowdown caused by the COVID-19 pandemic, Security Bank said it set aside P11 billion as provisions, which would cover for loan losses such as when borrowers go bankrupt or renegotiate obligations. This, compared to P639 million set aside in the same period of 2019.

“As we expect the impact of the pandemic on our loan portfolio will continue to unfold over the coming quarters, we have adopted a proactive stance on our provisions,” said Sanjiv Vohra, Security Bank president.

He added their balance sheet remained strong and that the company continued to make new investments despite the pandemic.

At the end of the semester, total deposits went up 14 percent to P511 billion. Low-cost savings and demand deposits grew 27 percent and increased to 48 percent of total deposits, up from 43 percent a year ago.

Total loans, excluding the lender’s finance portfolio, stood at P450 billion, up 7 percent year-on-year and down 2 percent quarter-on-quarter.

Retail loans were up 25 percent year-on-year and accounted for 27 percent of total loans. Wholesale loans grew 4 percent year-on-year. —MIGUEL R. CAMUS