DY family-led Security Bank Corp. reported higher earnings in the first half of the year, in part because of its outstanding performance in the second quarter and its robust lending portfolio.
In a disclosure to the Philippine Stock Exchange, the lender generated P4.9 billion net income from January to June, a 4-percent year-on-year increase versus the same period the previous year. The growth was attributed to the 28-percent growth in net interest income translating to P1.6 billion.
The bank secured P1.85 billion net income for the period of April to June, surging to 42 percent, fueled by a 34-percent year-on-year increase in net interest income to P3.9 billion, a 41-percent rise in service charges, fees and commissions, and a threefold increase in foreign-exchange income.
“We are pleased with the quality of our earnings because it is coming from recurring income and core businesses. Growth has been balanced with both wholesale and retail banking registering encouraging results,” Security Bank President and CEO Alfonso L. Salcedo Jr. said
“With the P37-billion equity investment by the Bank of Tokyo-Mitsubishi UFJ Ltd. (BTMU) in Security Bank in April 2016, we now have P94 billion in capital to fuel the bank’s expansion plans. Our medium-term objective is to grow our way back to market-leading return on shareholders’ equity,”
he added.
In the first half of 2016, the increase in net interest income to P7.4 billion came on the back of a 29-percent loan growth to P268 billion, and a 17-percent deposit growth to P301 billion.
The lender also reported low-cost deposit growth of 23 percent, while its corporate and commercial loans jumped by 27 percent.
It’s key consumer-loan portfolios composed of home and auto loans and credit-card receivables grew 61 percent and net interest margin improved to 3.2 percent in the second quarter, from 3.1 percent the previous quarter.
“We deployed the additional capital to accelerate the growth in our loan portfolio in the second quarter. This increased our loan-to-deposit ratio [CAR] to 89 percent. Our capital adequacy ratios increased, with common equity Tier 1 at 18.6 percent and total CAR at 21.2 percent,” Security Bank CFO Mr. Joselito E. Mape said.
The lender’s market capitalization stood at P145 billion as of June 30, 2016. Total assets amounted to P613 billion, reflecting a 39-percent growth year-on-year.
The lender’s service charges, fees and commissions rose 25 percent to P1.1 billion, propelled by bancassurance, credit cards, loan fees and advisory. Foreign-exchange income increased twofold to P422 million. Operating expense growth, excluding provisions for probable credit losses and impairments, was 8 percent and the cost-to-income ratio was 48 percent. Security Bank is among the five largest private domestic universal banks in the Philippines by total assets as of June 30, 2016 and has 277 branches and 582 automated teller machines nationwide.