Security Bank Q1 income down 6.4%
Security Bank Corp. chalked up a net profit of P2.8 billion in the first quarter, down by 6.4 percent year-on-year due to the decline in noninterest income and an increase in operating expenses.
Core business was robust as reflected by the 27-percent year-on-year growth in net interest income to P4.4 billion.
On the other hand, noninterest income, including securities trading gains, was down to P1.8 billion from P2.4 billion a year ago.
On the core lending business, the bank grew its loan book by 28 percent to P305 billion compared to the previous year. Wholesale loans increased 26 percent while consumer loans expanded by 51 percent. Net interest margin was maintained at 3.1 percent.
Despite growing its loan book at a faster pace than peers, Security Bank’s asset quality remained healthy, with net nonperforming loan (NPL) ratio easing to 0.14 percent compared to 0.29 percent a year ago.
The bank’s NPL reserve cover remained high at 197 percent versus 171 percent a year ago.
On the funding side, deposits increased by 34 percent to P379 billion. Low-cost deposits grew by 19 percent. Total assets ended the quarter at P729 billion, up by 41 percent.
The bank spent 47 centavos to earn every peso, translating to one of the most efficient cost-to-income ratios among local banking peers.
On the expenditure side, operating expense growth rate—excluding provisions for probable credit losses and impairments—rose by 18 percent. Compensation and fringe benefits increased by 19 percent, taxes and licenses by 20.9 percent, occupancy costs by 16.2 percent, depreciation and amortization by 38.5 percent, amortization of software costs by 82.3 percent, and miscellaneous expenses by 12.6 percent.
“We’re pleased with the loan and deposit growth which has sustained net interest income growth. The bank has been able to manage the cost-to-income ratio in the midst of heavy investments in branch network, information technology and people. These are investments for the future which will allow us to scale up the business,” Security Bank president and chief executive officer Alfonso Salcedo Jr. said in a statement.
At end-March, shareholders’ capital stood at P99.7 billion, up by 78 percent year-on-year.
Return on equity settled at 11.4 percent during the quarter.
The bank maintained a high common equity tier 1 ratio of 17.5 percent and total capital adequacy ratio of 19.9 percent.
Meanwhile, the bank has upgraded its core banking system as part of its technology transformation program.
The new system, used by leading financial institutions globally, will enable Security Bank to roll out new products and services much faster.
