Security Bank income up17%

MANILA, Philippines - Security Bank Corp. posted a 17 percent increase in net income to P1.43 billion in the first three months this year on the back of higher interest income and trading gains.

In its disclosure to the Philippine Stock Exchange, Security Bank said the increase in earnings was primarily driven by the 42 percent growth in net interest income to P2.8 billion, anchored on the expansion in loans and investment securities.

Net interest margin improved to 3.54 percent in the first three months, up from 3.33 percent in the fourth quarter of 2013 and from the 3.49 percent average for the whole of 2013.

Non-interest income contributed P790 million. Fees and commissions was at P361 million, up 11 percent quarter-on-quarter, while trading gains was at P320 million.

Security Bank’s total operating income increased 17 percent year-on-year while operating cost (excluding provisions for credit losses and impairments), grew 4.1 percent.

The bank made P133 million in credit provisions. Its non-performing loan (NPL) ratio was at 0.06 percent in the first quarter, further easing from 0.11 percent at end-2013, which is among the lowest in the banking industry.

NPL reserve cover, on the other hand was at 198 percent in the first three months, up from 195 percent in end-2013, which is among the highest in the industry.

Security Bank’s total resources increased 46 percent year-on-year to P377 billion as of March 31, 2014.

Loans grew 39 percent year-on-year while deposits increased 49 percent. The loan-to-deposit ratio stood at 78.8 percent.

The investment securities portfolio increased 132 percent year-on-year and 57 percent quarter-on-quarter.

The bank’s return on shareholders’ equity was at 13.8 percent and return on assets was at 1.6 percent in the three-month period.

“Our core businesses continue to grow alongside the healthy economy. Our net margin has improved and our asset quality remains superior. There is healthy demand for the bank’s services across all our customer segments,” Security Bank president and chief executive officer Alberto Villarosa said,

Security Bank plans to issue Basel III-compliant Tier 2 bonds to tap into value-adding opportunities in the market and fuel the bank’s growth.