SECURITY Bank Corporation posted net profit of P2.9 billion in the first quarter of 2020, up 21 percent from year-ago level.
Total revenues increased 75 percent to P13.2 billion, driven by sustained growth in core business income and securities trading gains. Excluding trading gains, total revenues grew 41 percent to P9.7 billion from the same period last year.
“We enter this period of challenge arising from the Covid-19 pandemic with a strong balance sheet and healthy liquidity and capital positions. We have the resources to serve our clients, protect our employees, and do our part to support our communities while maintaining the safety and soundness of the bank.” Security Bank President & CEO, Sanjiv Vohra, said.
Total net interest income increased 41 percent to P8.1 billion. Net interest margin improved to 4.68 percent, up 129 basis points year-on-year.
Total non-interest income increased 184 percent to P5.1 billion. Securities trading gains were P3.5 billion, 420 percent higher than P671 million a year ago.
Operating expense grew 28 percent driven primarily by manpower and costs related to business expansion. The cost-to-income ratio improved to 39.4 percent from 53.7 percent a year ago.
Pre-provision operating profit for the first quarter was P8 billion, 129 percent higher than a year ago. The bank set aside P5.7 billion as provisions for credit losses.
“This is more than the full-year 2019 provision for credit losses of P4.2 billion. Factors impacting the increase in provisions included credit model refinements reflecting the bank’s views on the current environment, headwinds in consumer and commercial lending, and the change in the loan mix towards more consumer loans,” Vohra said.
In view of the possible client impact of the pandemic, the bank said it has initiated portfolio reviews, reassessed its provisioning, and intensified client engagement during this period.
Gross non-performing loan ratio of 1.59 percent remained better than industry peers’ 1.79 percent as of February 2020 based on Bangko Sentral ng Pilipinas data. NPL reserve cover was at 128 percent versus 129 percent a quarter ago and 186 percent a year ago.
Total loans grew 14 percent to P468 billion. Retail loans grew 44 percent year-on-year, and account for 29 percent of total loans. Wholesale loans grew 6 percent.
Total deposits grew 9 percent year-on-year to P503 billion. Low-cost deposits grew 30 percent. Low-cost deposits are 48 percent of total deposits, up from 40 percent a year ago.
The government imposed an Enhanced Community Quarantine (ECQ) on March 17, 2020 as part of the measures to address the Covid-19 pandemic. Security Bank took various initiatives to secure the well-being of its employees, customers and stakeholders.
Security Bank continues to be among the country’s best capitalized private domestic universal banks. Common Equity Tier 1 Ratio was at 16.5 percent, same as a year ago. Total Capital Adequacy Ratio (CAR) was at 17.6 percent versus 19.0 percent a year ago. Total assets increased 3 percent year-on-year to P783 billion. Shareholders’ capital increased 7 percent to P119 billion.
