Security Bank Corporation posted a 66 percent year-over-year increase in net income to P2.7 billion in the first quarter of this year, driven by growth in core businesses, lower credit provisions and normalized income tax provisions.
2021 tax provisions were impacted by a one-time charge triggered by the passage of the CREATE Law.
“Despite the Omicron impact in January, we are pleased with the improvement in client activity levels for the first quarter, particularly for our corporate and home loans teams.
Various macro factors are unfolding in the coming months including: new government policy, the war in Ukraine, and central bank action on inflation, we are constructively engaged with our clients to help them navigate the current environment,” Security Bank President & CEO, Sanjiv Vohra, said.
Net interest income increased 5 percent to P7 billion. Net interest margin in Q1-2022 was 4.19 percent, slightly down by 2 basis points year-on-year.
Total non-interest income likewise increased 8 percent to P2.3 billion. Service charges, fees and commissions grew 22 percent to P1.3 billion, led by increase in fees from deposits, capital market and credit cards.
Other non-interest income excluding securities trading gains and fee income rose 168 percent to P1 billion, driven mainly by recovery on charged-off assetsand foreign exchange income.
Operating expense was 8 percent higher, driven by investments in technology and manpower to improve customer experience. The cost-to-income ratio was 58.96 percent compared to 57.6 percent a year ago.
Pre-provision operating profit was P3.8 billion, up 2 percent year-on-year. The bank set aside P80 million as provisions for credit losses in Q1-2022, a decrease versus year-ago level of P402 million.Gross non-performing loan ratio decreased to 3.65 percent from 3.94 percent in previous quarter. NPL reserve cover was 90 percent.
Return on shareholders’ equity increased to 8.81 percent from 5.38 percent a year ago.
Return on assets likewise increased to 1.55 percent from 0.96 percent in Q1-2021.
Low-cost savings and demand deposits grew 20 percent and increased to 61 percent of total deposits from 52 percent a year ago. This drove total deposits to grow 2 percent year-on-year to P530 billion.
Gross loans increased 8 percent year-on-year to P475 billion, driven by wholesale loans which grew 11 percent while retail loans decreased by 4 percent. Retail loans are 23 percent of total loans compared to 26 percent a year ago.
On a sequential quarter-on-quarter basis, gross loans grew 3 percent withboth wholesale and retail loans increasing by 3 percent and 2 percent, respectively. Low-cost savings and demand deposits increased by 3 percent. Q1-2022 net income was 31 percent higher compared to previous quarter.
Security Bank continues to be among the country’s best capitalized private domestic universal banks. Common Equity Tier 1 Ratio was 18.1 percent and Total Capital Adequacy Ratio (CAR) was 18.6 percent. Total assets stood at P707 billion. Shareholders’ capital was at P122.5 billion, up 1 percent.
On March 29, 2022, Security Bank approved cash dividend declaration of P1.50 per common share representing regular semestral cash dividend, with payment date on April 28, 2022.
