CEBU, Philippines - Security Bank Corporation (SECB) posted an 8.5 percent net income growth in the first quarter of this year generating P1.01 billion.
In a report during the company’s recently concluded annual stockholders meeting, SECB president and chief executive officer (CEO) Alberto S. Villarosa reported that the 2010 net income of P7.1 billion, represents a 134 percent increase from previous year, translating to industry-best 34.6 percent Return on Equity (ROE) for the year 2010.
The bank’s balance sheet grew 13.8 percent to P166.5 billion with a 6.6 percent increase in its loan portfolio. The major component of the impressive income performance was due to trading gains resulting from timely recalibration of our fixed income portfolios with focus on lowering durations to more liquid issues. This allowed the bank significantly greater flexibility in managing the interest rate risk in SECB’s investment securities portfolio.
“We are truly proud of these accomplishments for two reasons. First, it illustrated the vibrant and collaborative effort between our line and support functions. Secondly, it was critical to capitalize on a very limited window of bullish opportunity in the market. As a result, we were able to realize close to P4.0 billion in securities trading gains in the last quarter of the year,” said Villarosa.
Villarosa’s management report likewise focused on churning impressive asset quality levels with Non-Performing Loans (NPL) ratio of 1.1 percent, with absolute NPLs below P 1 billion, and with NPL cover unmatched at 319 percent.
The bank also managed to grow its capital base to P24.6 billion at the end of 2010. This translates to a total Capital Adequacy Ratio (CAR) of 21.8 percent which is above Bangko Sentral Ng Pilipinas (BSP) and international requirements.
During the shareholders’ meeting, the members of the Board were re-elected as follows: Frederick Y. Dy, Paul Y. Ung, Philip T. Ang (independent director), Anastasia Y. Dy, Jose R. Facundo, James JK Hung (independent director), Jose Perpetuo M. Lotilla (independent director), Diana Pardo-Aguilar, Eduardo I. Plana, Rafael F. Simpao, Jr. and Alberto S. Villarosa.
The shareholders likewise approved the declaration of a 20% stock dividend, subject to the approval of the Bangko Sentral ng Pilipinas (BSP). This is in addition to the P1.00 cash dividend previously approved by the Board and the BSP payable on July 1 to shareholders of record as of June 6.
Meanwhile, in a report Security Bank Corp. recently announced that it is acquiring 98% of Premiere Development Bank for P1.3 billion.
In a stock exchange disclosure, Security Bank said it signed an agreement with Premiere Bank's shareholders, including South China Resources Inc., on the sale.
South China, in a separate disclosure, said it was selling 351,454 shares in Premiere Bank at P181.7458 apiece. Its chairman, Edgardo Reyes, also sold 56,000 shares under his name.
The transactions are subject to regulatory approvals, the firms said.
The bank also announced to shareholders its joint venture partnership with Marubeni Corporation of Japan, to establish a leasing company that will initially focus on construction equipment, trucks and buses, subject to regulatory approvals.
Security Finance, Inc. (SFI), currently a wholly-owned subsidiary of SECB, shall be renamed and recapitalized with SECB owning 60 percent of the new leasing company and Marubeni owning 40 percent.
“We are optimistic that this joint venture shall bring in new clients, provide opportunities for bundling various services, expand our product line and loan portfolio and create value for the shareholders,” Villarosa said referring on the recently closed partnership.
“Partnership with Marubeni Corporation offers immediate benefits to the new leasing company, given its other joint ventures in the Philippines. Technology transfer is an added advantage with Marubeni’s experience in heavy equipment leasing in other countries. In addition, Marubeni offers a well-known brand that will be beneficial to the new leasing company,” Villarosa added.
Marubeni Corporation, duly organized and existing under the laws of Japan, is involved in the handling of products and provision of services in a broad range of sectors, including power projects and infrastructure, plants and industrial machinery, real estate development and construction, finance, logistics and information industry, and business investment, development and management. Marubeni has been engaged in the leasing business supporting the sales of construction machinery in the United Kingdom and in the Republic of Indonesia and seeks to strengthen this business as one of the most important business sectors, together with the distribution business. (FREEMAN)