Security Bank Q1 income drops 43% to P 1.64B

Security Bank Corp. posted P1.64 billion in first quarter net profit, down by 43 percent year-on-year, due to slower interest earnings and treasury gains alongside nonrecurring deferred tax charges.

The passage of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act triggered a one-time P1.2-billion charge for deferred tax assets.

Profit before tax stood at P3.3 billion for the first three months, up by 42 percent from the same period last year as total operating expenses declined at a much faster pace of 50 percent than the 33.5-percent drop in operating income.

“Our team’s focus on clients remains steadfast. We are hopeful that progress on vaccination in the coming quarters will help the country resume its growth trajectory. We are fortunate that our strong capital equips the bank to support clients directly through loans and indirectly through significant investments in both our team and our technology to improve customer experience,” Security Bank president and chief executive officer Sanjiv Vohra said in a press statement.

The first quarter performance translated to a return on shareholders’ equity of 5.38 percent versus 9.7 percent in the first quarter of last year.

Total net interest income for the period amounted to P6.6 billion, down by 18 percent year-on-year as margins softened while the loan book declined.

Net interest margin slipped by 29 basis points to 4.39 percent.

On the other hand, the bank’s loan book stood at P450 billion, down by 5 percent from the year-ago level. Gross retail loans declined by 12 percent year-on-year, accounting for about a quarter of total loans, while wholesale loans dipped by 2 percent.

Total non-interest income likewise fell by 58 percent year-on-year to P2.1 billion in the first quarter. Securities trading gains slid by 80 percent year-on-year to P689 million. INQ