Security Bank profit up 76%

Security Bank Corp. (SBC) increased its net earnings by 76 percent to P475 million in the first six months of 2003, from P269 million registered in the same period last year.

Bank officials said initiatives such as forging strategic alliances, deepening customer relationships, proper distribution channels, operating at an efficient level, and making wise and profitable investments continued to pay dividends for the medium-sized commercial bank.

The first semester results remain on track in achieving SBC’s its full-year net income target of P635 million, coming off a respectable P508 million earnings figure last year.

Rafael F. Simpao Jr., Security Bank president and chief executive officer, said that the bank’s gains were achieved in a difficult business environment, with continuing weak loan demand that kept loan portfolio levels flat.

"Efforts to reallocate assets towards investment securities boosted fixed income trading gains, while ongoing fundamental measures geared towards generating new revenue streams and reducing operating expenses were likewise successful in the first half," Simpao said.

Other efforts included the expansion of business volumes via focus on total customer relationship management and maximizing product cross-sale opportunities; the continuing rationalization of branches, products, and account relationships; and emphasis on building up fee-based income.

He further explained that the gains were achieved despite continuing efforts to strengthen credit reserves.

Non-performing loan (NPL) ratio stood at 9.5 percent as of end-June, better than the industry average of a little over 15 percent. Loan loss provisioning reached P489 million for an NPL cover of 56 percent, better than the 50 percent cover at end-2002.

In the second half of 2003, Security Bank will be pursuing its branch rationalization and relocation program, to be highlighted by the opening of a modern premier branch in Alabang.

Simpao said that it would also be launching new corporate and retail cash management services, building on its insurance distribution business with joint venture partner Philamlife, and promoting its new credit card brand, the Security Bank MasterCard.