Security Bank Corporation’s second quarter results improved across the board on a sequential basis. It reported net profit of P2.6 billion, up 8 percent quarter-on-quarter. Pre-provision operating profit total P4.5 billion, 23 percent higher than quarter-ago level due to higher revenue growth of 10 percent compared to operating expense growth of 3 percent.
Q2-2023 net interest income grew 11 percent over the quarter to P8.3 billion. Net interest margin in Q2- 2023 increased to 4.58 percent, up 53 basis points quarter-on-quarter and up 22 basis points year-on-year. Total non-interest income likewise increased 8 percent to P2.5 billion. Service charges, fees and commissions grew 13 percent to P1.5 billion. In Q2-2023, the bank set aside P983 million as provisions for credit losses.
n the first half of 2023 (H1-2023), Security Bank posted net profit of P4.9 billion, driven by growth in core businesses, an increase in quarterly net interest margin, and normalized credit provisions.
H1-2023 net interest income increased 9 percent year-on-year to P15.7 billion. Total non-interest income was at P4.9 billion, up 2 percent. Service charges, fees and commissions grew 7 percent to P2.8 billion.
H1-2023 operating expense was 16 percent higher, driven by investments in manpower and technology. Cost- to-income ratio was 60.4 percent compared to 55.9 percent a year ago.
Pre-provision operating profit was P8.2 billion. The bank set aside P1.6 billion as provisions for credit losses in H1-2023, an increase versus year-ago level of P408 million. Gross non-performing loan ratio decreased to 3.06 percent from 3.28 percent a year ago. NPL reserve cover increased to 100 percent from 92 percent a year ago.
Return on shareholders’ equity was 7.67 percent. Return on assets was 1.20 percent.
Total deposits stood at P525 billion. Low-cost savings and demand deposits as percent of total deposit increased to 63 percent, up from 59 percent a year ago. The Bank shed high-cost deposits, resulting in a 13 percent year-on- year decrease in time deposits.
Net loans stood at P485 billion. Retail and MSME loans combined increased 19 percent year-on-year while wholesale loans decreased 9 percent. The growth in retail and MSME loans was driven by home loans which grew 15 percent, credit cards which rose 33 percent, auto loans which grew 13 percent, and MSME loans which increased 62 percent. On a sequential quarter-on-quarter basis, retail and MSME loans combined increased 5 percent. Retail and MSME loans as percent of total loans increased to 28 percent, up from 26 percent a quarter ago and 23 percent a year ago. Total investment securities grew 32 percent year-on-year to P220 billion.
The bank maintains healthy liquidity, with liquidity coverage ratio (LCR) increasing to 183 percent as of 30 June this year, from 167 percent in previous quarter, and net stable funding ratio (NSFR) increasing to 128 percent from 127 percent in previous quarter.
Security Bank continues to be among the country’s best capitalized private domestic universal banks. Common equity Tier 1 ratio increased quarter-on-quarter to 16.8 percent. Total capital adequacy ratio (CAR) likewise increased to 17.1 percent. Total assets increased to P796 billion, up 4 percent year-on-year. Shareholders’ capital likewise increased to P131 billion, up 5 percent year-on-year.
For 2023, Security Bank was recognized Best Retail Bank in the Philippines by Alpha Southeast Asia for the fourth consecutive year; awarded Best for High Net Worth in the Philippines by Asiamoney for the third consecutive year; and was awarded Excellence in Employee Engagement by Retail Banker International in the RBI Asia Trailblazer Awards 2023. SB Capital Investment Corporation (Security Bank’s investment house subsidiary) was awarded Top Corporate Issue Manager/Arranger by the Philippine Dealing System (PDS) Group at the 18th Philippine Dealing System Annual Awards Night.
“We are encouraged with the progress made in the second quarter on both net margins and other income, while we continue with investments in technology and people to better serve our clients’ needs.” — Security Bank President & CEO, Sanjiv Vohra.
