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Security Bank Corporation (PSE: SECB) posted a net income of P 1.35 billion for the first nine months of 2006, 51% higher than the P 897 million earnings for the same period last year and surpassing by P 197 million the P 1.16
billion full year net income registered in 2005. The net income performance for the period translates to earnings per share of P 4.11, up from the P 2.72 per share recorded last year. The strong income growth resulted in an annualized return on average equity of 17.2%, outpacing the 11.3% registered for the same period last year.
The healthy earnings was driven by a solid growth in revenues, improving to P 4.5 billion for the nine months ending September 30, 2006 from P 4.1 billion in the comparative period last year. Although a decreasing interest rate environment for the better part of the first semester led to pressure on net margins, Security Bank seized opportunities to recognize trading gains on the Bank’s securities portfolio. Consequently, non-interest income reflects a 39% year-on-year increase from P 1.3 billion last year to P 1.8 billion this year.
With Security Bank being fully compliant with IAS/PAS requirements at year-end 2005, provisions for credit losses have significantly dropped by 55% to P 369 million as of September 30, 2006 from P 829 million a year ago without compromising the Bank’s asset quality. In fact, the Bank’s non-performing loan (NPL) ratio as of the third quarter of 2006 stands proudly at 4.1% with NPL cover at 144% versus 5.4% and 85%, respectively, as of end-September last year. This is superior to the industry’s average NPL ratio of 7.2% and average NPL cover of 81%.
Security Bank’s total resources remained relatively flat to the 2005 year-end level of P105 billion, while it continued to leverage on the efficiency of its distribution network enabling the Bank to further increase its deposit base to P 68 billion from the P 62 billion recorded as of end-September last year. This P 6 billion or 10% growth resulted primarily from the Bank’s relentless focus on generating lower-cost deposits.
Security Bank’s commitment to product and service excellence continues to receive international acclaim. This year, the Bank was cited in Asiamoney’s 2006 Cash Management Poll as the “2nd Best Local Cash Management Bank” in the Philippines. Likewise, for the second year in a row, the Bank was ranked among the country’s “Best Domestic FX Providers” for various FX products and services in the 2006 FX Poll of Asiamoney.
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