The bank attributed the improvement from the strong performance of interest differential businesses due mainly to improvements in deposits and investment securities coupled with more aggressive collection efforts on its portfolio of non-performing assets (NPAs).
Security Bank president and chief executive officer Alberto S. Villarosa said they are confident that the growth trend could be sustained in the coming months as the bank further intensifies its marketing and investment efforts.
Total revenues grew 15-percent year-on-year with net interest margins jumping 51 percent versus the first three months in 2003 due to higher volumes and better spreads, as well as significant collections on non-performing loans (NPLs).
"Growth in net margins was enough to cover for the drop in securities trading gains from a record high in the first quarter of 2003," the statement added.
Market conditions were not favorable for securities trading in the first quarter of 2004 due to the increase in the yield curves for both the peso and dollar rates, plus a higher interest rate environment.
Operating expenses net of gross registered tax (GRT) was kept under control with a six-percent growth rate over 2003.
NPL portfolio shrunk by 14 percent to P3.2 billion from last year’s level of P3.7 billion resulting in an NPL ratio of 8.3-percent better than the 8.7-percent in 2003.
Security Bank continued to take a prudent stand with its aggressive provisioning policy of at 58-percent, higher than the level of 40-percent last year.
Meanwhile, Villarosa said consumer and corporate banking businesses are tracking the three-year plan with the launch of new initiatives and products geared towards growth in low cost deposits.
Subsidiary SB Cards Corp. pursued aggressive acquisition and usage programs resulting in 17-percent growth from year-end levels in the card member base for the Diners Club International card and the Security MasterCard.
SB Equities, the bank’s stockbrokerage house, continued its aggressive sales and marketing positioning, and is now ranked eight among brokerage firms in terms of volume traded.
Security Bank has 114 branches from over 200 at the start of the 21st century. The reduction was a result of a consolidation and rationalization program. It expects to continue the rationalization program even as its increases new modes of branches such as mall kiosks and business centers.
Bank officials confided that an acquisition of another bank would increase its branch network but "that too would have to be rationalized."