Security Bank Corporation (PSE: SECB) posted a net profit of P2.4 billion in the first quarter of this year, driven by growth in its core businesses. On a sequential quarter-on-quarter basis, net profit increased 18 percent. Net interest margin increased to 4.06 percent, up by 14 basis points versus the previous quarter.
Facade shot of Security Bank’s office in Taytay, Rizal (IMAGE CREDIT: www.yellow-pages.ph)
In a press statament, the bank said that its net interest income also increased by 3 percent quarter-on-quarter.
On a year-on-year basis, total revenues grew 6 percent to P9.8 billion. Net interest income also increased by 7 percent to P7.5 billion. Total non-interest income was at P2.3 billion, up 2 percent year-on-year. Non-interest income was driven by service charges, fees, and commissions, which was up 2 percent year-on-year.
Operating expense was 12 percent higher versus the year-ago level, driven by investments in manpower and technology.
Pre-provision operating profit was P3.7 billion. The bank set aside PHP616 million as provisions for credit losses in Q1-2023. The gross non-performing loan ratio was at 3.12 percent, down from the 3.65 percent it recorded a year ago.
Meanwhile, gross non-performing loans were also reported to be lower by 1 percent versus the previous quarter. NPL reserve cover was at 99 percent, up from 90 percent a year ago. The return on shareholders’ equity was 7.42 percent while the return on assets was 1.15 percent.
Security Bank‘s balance sheet remains strong
Total deposits stood at P525 billion. Low-cost savings and demand deposits as percent of total deposit increased to 62 percent, up from 58 percent in the previous quarter. The bank shed high-cost deposits, resulting in time deposits decreasing 3 percent year-on-year and 28 percent quarter-on-quarter.
Net loans increased 5 percent year-on-year to P489 billion, driven by retail loans which grew 18 percent and wholesale loans which was up 1 percent. Home loans grew 18 percent and credit cards increased by 36 percent year-on-year. Retail loans are 26 percent of total loans, up from 23 percent a year ago.
On a sequential quarter-on-quarter basis, net loans decreased by 3 percent while retail loans increased by 4 percent. Wholesale loans also decreased 5 percent over the quarter. The bank continues to have healthy liquidity, however, with a Liquidity Coverage Ratio (LCR) of 167 percent and a Net Stable Funding Ratio of 127 percent as of March 31 this year.
Security Bank continues to be among the country’s best capitalized private domestic universal banks. Common Equity Tier 1 Ratio increased to 16.7 percent, up from 16.1 percent in the previous quarter. Its total Capital Adequacy Ratio (CAR) also increased to 17.0 percent, up from the 16.6 percent reported in the previous quarter.
Its total assets, on the other hand, increased to P794 billion, up 12 percent year-on-year. Its shareholders’ capital likewise increased to P128.7 billion, up 5 percent year-on-year.
Security Bank continues to make significant investments
In March 28 this year, Security Bank approved a cash dividend declaration of P1.50 per common share representing regular semestral cash dividend, with payment date on April 28, 2023.
For 2023, Security Bank was recognized “Best for High Net Worth in the Philippines” by Asiamoney for the third consecutive year. It was also recognized with “Excellence in Employee Engagement” award by Retail Banker International at the recent RBI Asia Trailblazer Awards 2023.
Meanwhile, SB Capital Investment Corporation, Security Bank’s investment house subsidiary, was also awarded “Top Corporate Issue Manager/Arranger’ by the Philippine Dealing System (PDS) Group during the recent 18th Philippine Dealing System Annual Awards Night.
“We are making significant investments in our team and our technology to support our clients and meet our medium-term goals by enhancing our data & technology infrastructure, strengthening cybersecurity, and tactically expanding our branch network,” said Sanjiv Vohra, President and CEO of Security Bank.
“With the prudent growth in our core businesses in Q1-2023, our balance sheet remains strong, anchored on our strong capital,” he added.