Security Bank net income up 77 percent
SECURITY Bank Corp. (SCB) announced last November 11 that it posted a 77-percent year-on-year (Y-O-Y) increase in net income to P8.6 billion in the first nine months of 2022, “driven by growth in core businesses, lower credit provisions and normalized income tax provisions.”
Total revenues grew 7 percent to P29.4 billion Y-O-Y, the lender said. Net interest income increased 7 percent to P22 billion. Net interest margin in the first nine months was 4.33 percent.
Total non-interest income increased 6 percent to P7.4 billion. Service charges, fees and commissions grew 22 percent to P3.9 billion, led by increase in fees from credit cards, deposits and capital markets. Other non-interest income excluding securities trading gains and fee income rose 32 percent to P3.6 billion, driven mainly by foreign exchange income and recovery on charged-off assets.
Operating expense was 5-percent higher, driven by investments in manpower and technology to improve customer experience. Cost-to-income ratio was 56.3 percent compared to 57.3 percent a year ago.
Pre-provision operating profit was P12.8 billion, up 9 percent Y-O-Y. The bank set aside P1.6 billion as provisions for credit losses in the first nine months of 2022, a 60 percent decrease versus year-ago level of P4.1 billion. Gross non-performing loan ratio decreased to 3.24 percent from 4.15 percent in previous year. NPL reserve cover increased to 94 percent from 91 percent in previous year.
Return on assets increased to 1.52 percent from 0.95 percent a year ago. Return on shareholders’ equity increased to 9.16 percent from 5.20 percent a year ago.
Balance sheet
Low-cost savings and demand deposits grew 13 percent Y-O-Y and account for 58 percent of total deposits. Total deposits grew 12 percent to P583 billion.
Net loans increased 12 percent Y-O-Y to P484 billion, driven by both wholesale and retail loans which grew 12 percent each. On a sequential quarter-onquarter basis, net loans decreased by 1 percent, with retail loans up 5 percent and wholesale loans down 3 percent. Retail loans are 24 percent of total loans, up from 23 percent a quarter ago.
Security bank continues to be among the country’s best capitalized private domestic universal banks. Common Equity Tier 1 Ratio was 16.6 percent and Total Capital Adequacy Ratio (CAR) was 17.1 percent. Total assets increased to P799 billion, up 14 percent Y-O-Y. Shareholders’ capital was at P124 billion.
SCB’S Board of Directors approved last October 25 the second semestral regular cash dividend of P1.50 per common share with payment date on November 24. This will bring the total cash dividends for the year to P3 per common share for a dividend payout ratio of 32.7 percent of 2021 net income. The bank had earlier paid regular cash dividend for the first semester of P1.50 per common share on April 28, 2022.
“Our third quarter results reflect continued growth for our retail and wholesale client segments. We channeled resources to support economic expansion, to address inf lation impacts and to enhance both customer and employee experience.” SCB President and CEO Sanjiv Vohra was quoted in the statement as saying.