Security Bank confident of hitting income target

Security Bank Corp. (SBC) is confident that it could hit its full-year net income target of P500 million to P530 million. In 2001, the bank registered a net profit of P427 million.

SBC president and chief executive officer Rafael Simpao said their "modest" target represents a 17 to 24 percent growth over the previous year’s earnings. For the first nine months this year, SBTC reported net earnings of P413.5 million.

"We are confident that we will overhit our yearend targets," Simpao said during the formal launching of a financing program between BMW Philippines Corp. and the bank.

The main driver for SBC’s impressive performance was fee-based income, which contributed 43 percent of the bank’s earnings from a little over 30 percent last year. Interest-based earnings accounted for 57 percent of overall earnings, down from 70 percent a year ago.

Among the notable fee-based activities is the acceptance of tax payments, the marketing of insurance products through a joint venture marketing company, and the recent alliance with auto giant BMW.

Security Bank is one of only three commercial banks that have been accredited by the Bureau of Internal Revenue (BIR) to receive payment of taxes from both individual and corporate taxpayers.

In the second half of the year, the bank formed into a joint venture marketing company with insurance giant Philippine American Life and General Insurance Co. (Philamlife) for the marketing of life insurance products with the assistance of the bank.

By the end of the year, SBC will launch its own version of Mastercard credit card to complement its Diner’s Card business.

Simpao said the bank’s non-performing loans (NPLs) ratio to total loan portfolio remained at a safe 12 percent while its capital adequacy ratio (CAR) was at a healthy 14 percent. The average NPL among commercial banks is almost 18 percent while the CAR industry average is a little over 13 percent.

Meanwhile, Simpao said Security Bank does not plan to raise Tier 2 capital this year as it continues to rely solely on organically generated funds.

The bank declared a cash dividend of P0.10 in the middle of the year.