Security Bank Corporation (PSE: SECB) posted net profit of P2.4 billion in the first quarter of the year driven by growth in core businesses.
On a sequential quarter-on-quarter (Q-on-Q) basis, net profit increased 18 percent. Net interest margin increased to 4.06 percent, up by 14 basis points versus previous quarter.
Net interest income likewise increased 3 percent Q-on-Q.
On a year-on-year (YOY) basis, total revenues grew 6 percent to P9.8 billion. Net interest income increased 7 percent to P7.5 billion. Total non-interest income was at P2.3 billion, up 2 percent YOY. Non-interest income was driven by service charges, fees and commissions, which was up 2 percent YOY.
Operating expense was 12 percent higher versus year-ago level, driven by investments in manpower and technology.
Pre-provision operating profit was P3.7 billion. The Bank set aside P616 million as provisions for credit losses in first quarter of 2023. Gross non-performing loan (NPL) ratio was at 3.12 percent, down from 3.65 percent a year ago. Gross non-performing loans were also lower versus previous quarter by 1 percent. NPL reserve cover was at 99 percent, up from 90 percent a year ago.
Return on shareholders’ equity was 7.42 percent. Return on assets was 1.15 percent.
Total deposits stood at P525 billion. Low-cost savings and demand deposits as percent of total deposit increased to 62 percent, up from 58 percent in previous quarter. The Bank shed high-cost deposits, resulting in time deposits decreasing 3 percent YOY and 28 percent quarter-on-quarter (Q-on-Q).
Net loans increased 5 percent YOY to P489 billion, driven by retail loans which grew 18 percent and wholesale loans which was up 1 percent. Home loans grew 18 percent and credit cards increased 36 percent YOY. Retail loans are 26 percent of total loans, up from 23 percent a year ago.
On a sequential Q-onQ basis, net loans decreased by 3 percent. Retail loans increased 4 percent while wholesale loans decreased 5 percent over the quarter.
The Bank continues to have healthy liquidity, with Liquidity Coverage Ratio (LCR) of 167 percent and Net Stable Funding Ratio (NSFR) of 127 percent as of March 31, 2023.
Security Bank continues to be among the country’s best capitalized private domestic universal banks. Common Equity Tier 1 Ratio increased to 16.7 percent, up from 16.1 percent in the previous quarter. Total Capital Adequacy Ratio (CAR) increased to 17.0 percent, up from 16.6 percent in the previous quarter. Total assets increased to P794 billion, up 12 percent YOY. Shareholders’ capital likewise increased to P128.7 billion, up 5 percent YOY.
On March 28, 2023, Security Bank approved cash dividend declaration of P1.50 per common share representing regular semestral cash dividend, with payment date on April 28, 2023.
For 2023, Security Bank was recognized Best for High Net Worth in the Philippines by Asiamoney for the third consecutive year; and was awarded Excellence in Employee Engagement by Retail Banker International in the RBI Asia Trailblazer Awards 2023. SB Capital Investment Corporation (Security Bank’s investment house subsidiary) was awarded Top Corporate Issue Manager/Arranger by the Philippine Dealing System (PDS) Group at the 18th Philippine Dealing System Annual Awards Night.
“We are making significant investments in our team and our technology to support our clients and meet our medium-term goals by enhancing our data and technology infrastructure, strengthening cybersecurity, and tactically expanding our branch network. With the prudent growth in our core businesses in Q1-2023, our balance sheet remains strong, anchored on our strong capital,” said Security Bank President and CEO Sanjiv Vohra.
