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Security Bank Corporation (PSE:SECB) disclosed its first quarter results reporting an annualized ROE of 26.6% for the period, higher than the 22% ROE registered at year-end 2007. This stellar accomplishment follows five years of successive improvements in ROE beginning 2002. The Bank maintains its track record for delivering excellent shareholder value on the back of a net income of PhP 836.9 million, PhP 78.1 million or 10.3% higher than the comparative period in 2007.
Security Bank Corporation President and Chief Executive Officer, Mr. Alberto S. Villarosa remarked on the 2008 Q1 results: “We are able to consistently deliver high ROE coming from a series of strategic initiatives commenced five years ago to purposely drive shareholder value. It is a convergence of programs to streamline the business that has been generating incremental ROE year on year and will continue to sustain growth and profitability.”
The positive net income performance was delivered through a PhP 123.0 million or 5.6% increase in revenues. Net interest income which stood at PhP 1.1 billion was slightly higher than the same period last year. The components of net interest income reflected the change in the bank’s balance sheet composition. In particular, the PhP 14.4 billion or 42.7% increase in loans to PhP 48.1 billion over the first quarter 2007, contributed to the Php235.7 million or 33.1% increase in interest earnings from loans and receivables over the same period. Funding costs were likewise managed enabling a 3.8% year-on-year reduction in interest expense.
The Bank kept up the healthy pace growth in other income which stood at PhP 1.2 billion, PhP 113.0 million or 10.4% higher year-on-year. Although securities trading gains dipped 12.3% to PhP 630.1 million, increases in foreign exchange gains and service charges contributed to the positive growth.
Mr. Carlos M. Borromeo, Security Bank Corporation Chief Financial Officer, delved further on the bank’s income performance: “Our efforts at improving the balance sheet allocation contributed to a continued growth in core earnings and customer business that likewise resulted in positive results in the Bank’s other income components.”
Operating expenses, which stood at PhP 923.6 million net of provisions and impairment related expenses, reflected a moderate growth of 5.7% over the same period last year.
Security Bank’s year-to-date performance clearly underscores its focus on outstanding shareholder returns with a further improvement in average return on assets to 2.69% versus the 2.03% reported in 2007. These combined results translate to earnings per share (EPS) of Php 2.54, up from PhP 2.30 in March 2007.
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