Security Bank net income up 115% in 1st half-A A +A
Tuesday, August 12, 2014
MAKATI – Security Bank Corp. earned P3.614 billion in net income in the first half of 2014, representing a 115 percent year-on-year growth and 17.2 percent return on shareholders’ equity (ROE).
This result was driven by sustained growth in the bank’s core businesses, with loan portfolio increasing by 30 percent year-on-year to P173 billion, investment securities expanding by 106 percent to P111 billion, and deposits growing by 22 percent to P218 billion, which fuelled a 31 percent year-on-year increase in Security Bank’s total assets to P385 billion. The loan-to-deposit ratio was 79 percent. The return on assets (ROA) was 1.9 percent.
Net interest income increased by 46 percent year-on-year to P5.8 billion in the first half of the year. Net interest margin was sustained at 3.5 percent, the same level as in 2013. Core revenues, which consist of net interest income, fee-based income and trading gains attributable to customer flows, increased by 31 percent year-on-year to P7 billion. Fee-based income inclusive of asset management was P850 million. Over-all trading gains contributed P1.66 billion.
Security Bank’s total operating income increased by 59 percent year-on-year to P8.4 billion while operating cost (excluding provisions for credit losses and impairments) grew by 11.8 percent. Ten new Security Bank branches were opened in the second quarter. The Security Bank group has a network of 253 branches and 444 ATMs as of June 30, 2014.
After almost doubling its branch network in a span of less than three years, Security Bank in 2014 is implementing BetterBanking, a comprehensive re-branding and retail bank transformation aimed at making banking easier and better for clients.
Clients currently enjoy enhancements in services that include transaction alerts every time they use their cards, no charges for transacting at other banks’ ATMs, faster and paper-less transactions in the branches, faster approvals for home mortgage and consumer loan applications, among others.
Security Bank continues to sustain superior asset quality with gross NPL ratio at 0.57 percent as of June 2014 compared to 0.59 percent a year ago. Notwithstanding this, the bank made P700 million in credit provisions in the first half, further increasing the reserve cover to 297 percent as of June 30, 2014 from 266 percent a year ago. Pre-provision operating profit (PPOP) was at P4.3 billion, representing a 143 percent year-on-year increase.
After the P1.00 per share in semestral cash dividends to stockholders in June 2014, the bank’s capital attributable to shareholders grew by 15 percent year-on-year to P43.7 billion. In July 2014, Security Bank successfully issued P10 billion in Basel III compliant Tier 2 Notes to further increase its total capital adequacy ratio to support the continuing growth in its earning assets.
Security Bank president and chief executive officer Alberto S. Villarosa said, “All of our business segments strongly contributed to the results, thanks to the healthy economy and our strong customer focus and business discipline.”
Security Bank chief financial officer Joselito E. Mape said, “Our cost efficiency continues to improve, with cost-to-income ratio at 44 percent in 1H-2014. Our capital adequacy ratios under Basel III are sustained at healthy levels, with Common Equity Tier 1 (CET 1) at 13.2 percent and Total CAR at 14 percent as of June 30, 2014.” PR
Published in the Sun.Star Cebu newspaper on August 13, 2014.