Security Bank income rises 11% to P1.2B in Q1

MANILA, Philippines - Security Bank Corp., the financial arm of the Dy family, posted a net income of P1.2 billion in the first quarter of 2013, up 11 percent  from the same period in 2012 due to higher deposit and loan levels.

In a statement, SCB said its return on equity for the period stood at 13 percent.

Loans increased by 21 percent to P119.2 billion. In support of economic development, loans went to critical sectors such as power, utilities, infrastructure, wholesale and retail trade, food, agriculture and consumer goods.

Deposits likewise rose by 22 percent to P141.8 billion, which matched the pace of loan growth.

Security Bank president and CEO Alberto Villarosa said: “Our business results as well as the execution of our business expansion strategy are on track with our objectives.”

“The bank is well-positioned to service the requirements of our customers and key sectors of the economy during this exciting period for our country ushered in by its rating upgrade to investment grade by Fitch Ratings and Standard and Poors. The Philippines broke through a critical rating level and this opens up the country to new investment opportunities,” Villarosa said.

Total assets grew by 20 percent year-on-year to P258.9 billion.

In 2012, Security Bank made significant investments to increase its branch network, strengthen core businesses and develop new businesses such as consumer lending.

The bank added 72 branches, including the 38 branches of the former Premier Development Bank (now Security Bank Savings) which it acquired in February 2012. Two more Security Bank branches were opened in the first quarter of 2013.

As of end-March 2013, the Security Bank group has a total of 210 branches, of which the universal bank has 172 branches and thrift bank subsidiary Security Bank Savings has 38 branches.

The bank’s revenues for the first quarter of 2013 grew by 31 percent year-on-year to P3.1 billion.

Contributing to revenue growth was non-interest income which increased by 230 percent to P1.1 billion, driven by the Bank’s fee and other income generating core activities.

Service charges, fees and commissions grew by 60 percent driven by capital markets, stock brokerage, deposits and loan fees, while trust income increased by 22 percent. Gains from the trading portfolio also increased as the Bank took advantage of favorable market conditions.

Net interest income from the interest differential business was steady at P2 billion.

Operating costs (excluding provisions for credit losses and impairments) increased by 45 percent year-on-year to P1.7 billion.

This cost growth reflects the impact of the 2012 branch network expansion. Manpower compensation increased due to higher headcount, as did occupancy costs, depreciation and amortization and other branch expansion-related cost items. The cost-to-income ratio was 54 percent.