Security Bank Corporation’s quarterly profits continued to improve, with Q3-2023 net profit increasing to P2.65 billion, up 4 percent quarter-on-quarter and up 15 percent year-on-year.
Third-quarter net interest income likewise increased to P9 billion, up 8 percent over the quarter and 19 percent over the year. Net interest margin in increased to 4.86 percent, up 28 basis points quarter-on-quarter and up 66 basis points year-on-year. Service charges, fees and commissions grew to P1.5 billion, up 1 percent quarter-on-quarter and 15 percent year-on-year. Pre-provision operating profit was at P4.1 billion.
During the quarter, Security Bank set aside P1 billion as provisions for credit losses.
In the first nine months, the lender posted net profit of P7.6 billion, driven by growth in core businesses, increase in quarterly net interest margin, and normalized credit provisions.
Nine-month net interest income increased 12 percent year-on-year to P24.7 billion. Total non-interest income was at P6.5 billion. Service charges, fees and commissions grew 10 percent to P4.3 billion.
Nine-month operating expense was 14 percent higher, driven by investments in manpower and technology. Cost-to-income ratio was 60.7 percent compared to 56.3 percent a year ago.
Pre-provision operating profit was P12.3 billion. The lender set aside P2.6 billion as provisions for credit losses over nine months this year, an increase versus year-ago level of only P1.6 billion. Gross non-performing loan ratio was 3.15 percent and NPL reserve cover was 92 percent.
Return on shareholders’ equity was 7.81 percent. Return on assets was 1.22 percent.
Total deposits stood at P562 billion. Low-cost savings and demand deposits as percent of total deposit was at 59 percent, up from 58 percent a year ago. Security Bank shed high-cost deposits, resulting in a 6 percent year-on-year decrease in time deposits.
Two new bank branches were opened in the third quarter, bringing its branch network to 319 branches as of 30 September 2023. The new branches are located in Aparri (Northern Cagayan) and Parañaque (Metro Manila).
Net loans increased to P502 billion, up 3.8 percent year-on-year and up 3.6 percent quarter-on-quarter.
Retail and MSME loans combined increased 22 percent year-on-year while wholesale loans decreased 3 percent. The growth in retail and MSME loans was driven by home loans which grew 15 percent year-on-year, credit cards which rose 34 percent, auto loans which grew 23 percent, and MSME loans which increased 71 percent.
On a sequential quarter-on-quarter basis, retail and MSME loans combined increased 7 percent. Retail and MSME loans as percent of total loans increased to 29 percent, up from 28 percent a quarter ago and 24 percent a year ago. Total investment securities grew 13 percent year-on-year to P216 billion.
