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The Board of Directors of Security Bank Corporation (PSE:SECB) approved the declaration of a P0.75 cash dividend payable upon approval of the Bangko Sentral ng Pilipinas. The cash dividend consists of a regular cash dividend amounting to P0.25 per share and a P0.50 per share special cash dividend. This second cash dividend brings total dividends declared by the Bank this year to P1.50 per share, a 50% growth over that of 2005. The current dividend results in a dividend yield of 3.4% based on the average share price for the last seven months and is equivalent to a 43% pay-out ratio of Security Bank’s prior year’s earnings. Security Bank has progressively improved its cash dividend declarations since its first cash dividend declaration in 2002, alongside its successful efforts at building a sustainable earnings base for the Bank.
Security Bank posted a net income of P1.01 billion for the first semester of 2006, 50.7% more than the P670 million earnings for the same period last year and is almost equal the net earnings achievement for the full year of 2005 which stood at P1.16 billion. Earnings per share for the first semester of 2006 likewise increased from P2.03 to P3.07 per share this year. The Bank’s average return on equity has shown considerable improvement over the years, increasing from the single digit levels reflected after the Asian financial crisis to the current annualized return on average equity of 19.5%, a significant growth over the 12.6% in the comparative period last year.
The Bank has likewise exhibited exemplary asset quality indicators, underscoring the Bank’s prudent approach to growth as its non-performing loans (NPL) ratio stood at a healthy 4.2% with NPL cover at 141%, certainly among the best in the industry. This is the result of the Bank’s commitment to and execution of a credible NPL resolution plan over the last few years.
The solid earnings performance coupled with its emphasis on asset quality have further bolstered the Bank’s financial strength resulting in a capital adequacy ratio of 24% as of June 2006.
In a related statement, Security Bank President Alberto S. Villarosa stated: “We have over the last three years consistently improved on our performance year-on-year, achieving a growth and profit performance previously unequalled in Security Bank’s corporate history. We believe that opportunities are always present regardless of the environment and that it is a question of identifying these opportunities and quickly capitalizing on these developments to further build our business.”
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