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The Board of Directors of Security Bank Corporation (PSE:SECB) approved the declaration of a P1.00 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 P0.75 per share special cash dividend.
The regular dividends of P 0.25 per share are at par with those declared in the first semester of 2006 while the special cash dividend of P 0.75 per share represents a P0.25 or 50% increase. The progressive increases in cash dividend declarations are taking place against a backdrop of sustained increase in the bank’s earnings base as Security Bank registered a net income of P 1.9 billion in 2006 or a 65% growth occurring on the heels of two successive years of at least 50% growth.
In a related statement, Security Bank Chief Financial Officer Carlos M. Borromeo stated: “Our sustained organic growth over the last three years coupled with our excellent asset quality have significantly strengthened the bank’s capital base and distinguishes us as one of the few players that need not raise additional capital to meet the revised capital standards contemplated in Basel II. Moreover, in view of our capital adequacy we are well poised to significantly take on additional credit exposure as these become available. Consequently, we have been able to sustain a progressive improvement in our dividend pay-outs while retaining a sufficient amount of capital to support our medium term growth plans. Based on Security Bank’s share price of P65.50 at year-end 2006, the P1.00 dividend per share results in an annualized dividend yield of 3.0%.
Security Bank’s 2006 net income performance of P1.9 billion, 65% higher than the prior year, translated to the highest return on equity for the private domestic commercial banks of 17.3%. Over the last three years, the bank has registered at least a 50% increase in net income. The bank has continued to receive a strong endorsement from the investing public as its share prices have increased from the P65.50 registered in 2006 to the current share price level of P78.00, an incremental P 4.1 billion in market value built up in the last four months alone.
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