Security Bank doubles bond program to P200 billion

MANILA, Philippines — Security Bank Corp. has doubled its peso bond program to P200 billion from P100 billion previously, possibly eyeing to return to the debt market soon.

In a disclosure to the Philippine Stock Exchange, Security Bank said its executive committee, as delegated by its board of directors, approved the hike in the bank’s peso bond and commercial papers program size.

“An issuance may follow, subject to market conditions,” the bank said.

Earlier in July 2023, Security Bank raised a record P18.5 billion as investors swarmed its bond offering.

The issuance was part of the bank’s P100-billion peso bond and commercial papers program and was more than 2.3 times oversubscribed from its original issue size of P8 billion.

Proceeds of the fund raising activity helped diversify the bank’s funding sources and support its lending activities.

In 2022, Security Bank raised P30.6 billion as it tapped the domestic bond market twice. It issued P16 billion worth of fixed-rate bonds due 2024 in July and another P14.6 billion in November.

Security Bank’s earnings rose by 11 percent to P2.62 billion in the first quarter from P2.36 billion in the same quarter last year amid the robust growth in it’s retail and micro, small, medium enterprise (MSME) businesses.

The bank’s net interest income surged by 44 percent to P10.73 billion as net interest margin rose to 5.32 percent from 4.06 percent as of end-December 2023.

The bank’s loan book grew by 12 percent to P545 billion in the first quarter on the back of a 32-percent increase in retail and MSME loans and a four percent rise in wholesale loans.

The growth in retail loans was attributable to the 18-percent rise in home loans, 46-percent surge in auto loans and 49-percent jump in credit card loans. Meanwhile, MSME loans grew 74 percent.

Provision for credit and impairment losses plunged by 30 percent to P1.5 billion from January to March.