by Jan Michael Carpo, Reporter
Security Bank Corp. (Security Bank) has announced a robust 12% growth in net income, reaching ₱8.55 billion for the first nine months of 2024, a notable increase from the ₱4.83 billion net income it posted during the same period last year.
This surge reflects the bank’s continued investments in technology, personnel, and customer engagement, positioning it as a key player in the Philippine banking industry’s digital transformation.
For the third quarter alone, Security Bank posted a 14% year-on-year growth in net income to ₱3 billion, with quarterly profits increasing by 7%.
President and CEO Sanjiv Vohra attributed this success to the bank’s strategic initiatives, saying, “We are happy with the outcomes of the third quarter. Our technology, substantial personnel investments, and client involvement have all contributed to the bank’s rapid expansion. We are thrilled to fulfill our Better Banking pledge.”
Security Bank’s revenue and lending growth drive performance
Security Bank’s total revenues soared by 28% year-on-year, reaching ₱40 billion, driven primarily by a 31% rise in net interest income to ₱32.4 billion. The bank’s net interest margin also grew to 4.90%, reflecting an increase in lending activities and higher yields on loans.
Non-interest income rose by 18% to ₱7.6 billion, supported by a 55% surge in service charges, fees, and commissions, amounting to ₱6.7 billion.
On the lending side, the bank’s loan portfolio expanded by 24% year-on-year to ₱623 billion, with retail and MSME (micro, small, and medium-sized enterprise) loans experiencing a remarkable 38% annual growth. Key contributors included:
- Credit card loans, which surged by 70%.
- Auto loans, up by 51%.
- Home loans, increasing by 21%.
- MSME loans, growing by 58%.
This robust loan growth was complemented by a 28% increase in deposits, reaching ₱720 billion, indicating heightened consumer confidence and engagement with the bank’s services.
Efficiency and resilience amid rising costs
Operating expenses increased by 24%, reflecting the bank’s significant investments in technology and manpower to support growth. Despite this, Security Bank achieved a more efficient cost-to-income ratio of 58.8%, an improvement from 60.7% last year.
Provisions for credit losses nearly doubled to ₱5.1 billion, up by 96.2%, reflecting the bank’s proactive measures to address potential risks in its loan portfolio.
However, the bank maintained a healthy NPL (non-performing loan) reserve cover of 79.5%, with its gross NPL ratio declining to 3.08%, signalling robust risk management practices.
A catalyst for industry transformation
Security Bank’s strong performance not only highlights its resilience but also underscores its role in driving broader changes in the Philippine banking industry.
The bank’s commitment to digitalization — as evidenced by its investments in technology and expansion of retail banking services — aligns with the industry’s ongoing shift toward modern, customer-centric banking solutions.
The bank operates 334 branches and 678 ATMs across the country, ensuring accessibility for its growing customer base. Its significant growth in retail and MSME lending also supports financial inclusion efforts, particularly for underserved sectors.
Earlier this year, the bank also introduced an all-in-one digital payment solution that offers a one-stop solution for MSMEs, allowing them to seamlessly accept payments from customers through a variety of channels.
Named “Security Bank Collect,” the new platform is powered by leading digital payment service provider Magpie.IM Inc., which helps centralize sales invoicing and payment collections. This eliminates the tedious and error-prone task of manual reconciliation, allowing entrepreneurs to focus on what they do best – running their businesses.
Impact on the Philippine banking sector
Security Bank’s results are a bellwether for the Philippine banking industry, which is increasingly focused on digital transformation, innovation, and inclusivity. By prioritizing technology and customer engagement, the bank exemplifies how financial institutions can adapt to changing consumer demands while maintaining profitability.
The strong growth in loans and deposits indicates a reinvigorated economy, with businesses and consumers demonstrating renewed confidence in financial services.
Security Bank’s success in expanding retail and MSME loans also highlights the vital role banks play in supporting small businesses, which are the backbone of the Philippine economy.
As the Philippine banking sector continues to evolve, Security Bank is poised to remain a key player. The bank’s investments in technology and personnel, combined with its focus on customer-centric services, provide a solid foundation for sustained growth.
With innovations in digital banking and a commitment to financial inclusion, Security Bank is not only enhancing its competitive edge but also contributing to the broader development of the Philippine banking landscape. Its strong performance in 2024 underscores a promising future for both the bank and the industry as a whole.