Security Bank sees steady rise in profits

Security Bank’s income for this year will show a marked increase from past levels as management efforts in the previous years to put the bank in top shape start paying off.

Rafael Simpao Jr., Security Bank president, said for the first nine months of the year alone, the bank already posted a net income of P549 million, surpassing the full-year 2002 net income of P508 million. The income for the three quarters represents a 33-percent growth over the P413 million earned for the same period in 2002.

Simpao attributed the bank’s income performance to higher net margins from favorable yields on earning assets and to efficient management of funding costs. Non-interest income sources were steady from sustained trading gains and from fees and commissions earned from increased transaction volumes and participation in loan and investment deals.

Also, as productivity rose and operating expenses fell, the cost to income efficiency index improved to 53 percent from last year’s 57 percent.

Simpao said Security Bank, controlled by the family of chairman Frederick Dy, is strategically poised for growth with its fundamentals now among the most sound in the industry.

Its assets stand at P70 billion, the 10th largest among private universal banks. Its non-performing loan ratio of 11.7 percent, and its NPL cover of 57 percent are superior to industry averages. Its capital adequacy ratio likewise exceeds the regulatory requirement by over 40 percent.

"Management has taken a long hard look at the bank, the industry, and where we want to be. The bottom line is we want to be stronger, strong competitive, efficient, and profitable, and we are taking all the needed measures to achieve these," he said. "The bank has all the signs of growing: income is going up while costs are being managed prudently; new technology has been brought in for efficiency; attractive products are being introduced; and alliances are being forged," he said.

Also, to ffurther improve service and raise productivity, Simpao said some branches had been relocated to areas where they can best serve clients. The bank has 114 branches throughout the country at present.

"This is a continuing process. We are always on the lookout for doing things and serving our clients even better. In return, we know we will be repaid with further growth," he said.