Security Bank Corporation posted a record-high P8.55 billion in net profit in 2016, up 11 percent. This result was driven by strong growth in core recurring income.
Net interest income increased 28 percent to P15.9 billion, which more than offset the P1.1 billion decrease in trading gains.
Gains on sale of securities were lower at P1.8 billion from P2.9 billion in 2015. Net interest margin was steady at 3.1 percent.
“We are pleased with the quality of our earnings. Our 2016 results show steady progress in our core recurring income. The growth in our net interest income more than offset the lower trading gains. Notably, the growth in our net interest income has accelerated to 30 percent year-on-year in Q4-2016 from 28 percent in previous quarters. Our loans and deposits are growing robustly. Our asset quality and cost-to-income are in good shape. We continue to invest in growing the business. To cap our year, we are honoured to have been named Bank of the Year – Philippines back-to-back awardee by The Banker, having won the same award in 2015. We won this award three times in the past five years. We were also named Philippines’ Best Bank by Euromoney in 2016. We thank our client-partners who inspire us to be consistently better. We remain focused on delivering our promise of BetterBanking,” said Security Bank President and Chief Executive Officer Mr. Alfonso Salcedo.
For the fourth quarter 2016, Security Bank’s net income increased 18 percent year-on-year to P1.9 billion, driven by a 30 percent increase in net interest income to P4.4 billion.
Total loans and investments in corporate bonds increased 25 percent to P317 billion. Corporate, commercial and retail customer loans increased 20 percent to P289 billion.
Deposits likewise grew 20 percent to P347 billion, with low-cost deposits increasing 20 percent.
Loan growth continued its trajectory by segment with corporate and commercial loans growing 20 percent and total consumer loans increasing 56 percent. Credit card receivables decreased by 5 percent due to the sale of the Diners Club franchise. Retail loans account for 13 percent of total loan portfolio, up from 10 percent in 2015.
Total assets increased 31 percent to P695 billion. Asset quality remained healthy, with net non-performing loan (NPL) ratio at 0.44 percent, which is among the lowest in the industry. Gross NPL ratio was 0.8 percent, same as in 2015. NPL reserve cover stood at 170 percent. Notwithstanding the healthy asset quality, Security Bank increased its provision for probable credit losses by 52 percent to P953 million.
The cost-to-income ratio was 50 percent. Operating expense growth was 11 percent as the bank continued to invest in scalability of its business, making major investments in information technology, people and branches.
Security Bank has 292 branches and 622 ATMs to-date, having added 30 new branches through 2016 up to January 2017.