|
Security Bank Corporation (PSE: SECB) posted an unaudited net income of P 1.9 billion for the full year of 2006, 65% more than the P 1.16 billion earnings registered the previous year. With its third consecutive year of greater than 50% growth in net income, the bank boosted its return on equity to 17.3% substantially higher than the 13.4% recorded in 2005. Consequently, full year unaudited earnings per share greatly improved to P 5.77 versus the prior year’s P 3.51 per share.
The continued exemplary growth in earnings was underpinned by a healthy increase in total revenues registering P 6.6 billion, P 625 million greater than a year earlier. Expenses showed moderate increases and coupled with the healthy revenue growth resulted in a cost-to-income ratio of 43% versus the prior year’s 46%.
Meanwhile provisions slowed down considerably to P 530.8 million, lower by 27.5% or P 201.4 million as the Bank had completed its asset clean up and impairment activities as planned. This resulted in the Bank improving its NPL ratio to 4.2% from the 5.3% reflected at the end of 2005 while NPL cover further increased to 154.5% from the previous year’s 141.6%.
The buoyant earnings performance occurred on the back of a 16.5% growth in the Bank’s balance sheet which increased from the prior year’s level of P 105.0 Billion to P 122.3 Billion. Fuelling the expansion in the balance sheet is a robust build up in deposits which grew 34% over the previous year to P 88.8 Billion. The incremental deposit funding was momentarily deployed into investment securities (AFS) which increased by P 13.5 Billion to P 50.2 Billion while the bank focused on programs to build its loan portfolio as exemplified by its Homelite Mortgage offering in partnership with Megaworld. This loan program is Security Bank’s initial foray into customized mortgage offerings in support of real estate developer-led sales efforts which will subsequently be expanded to include other developers. The Bank is well poised to take advantage of an upturn in the credit environment as its capital adequacy ratio at the end of 2006 stood at 24.0% versus 14.5% at 2005.
|
