Security Bank Corporation (PSE : SECB) expects to further benefit from a reinvigorated banking sector for the rest of the year after it reported generating a 20.2% increase in its loan portfolio to P98.6 billion, up by P16.6 billion, in the first quarter from a year ago.
In a report to the Philippine Stock Exchange, Security Bank disclosed that net interest income for the quarter grew to P2 billion, 22.3% higher compared with the same period last year reflecting the Bank’s focus on driving growth through its core businesses.
Security Bank President and Chief Executive Officer Alberto S. Villarosa, said after over 10 years of under-investment in the Philippine economy, a generally positive tone is becoming evident in terms of domestic market confidence and an increasing willingness among bank clients to make long-term investments.
"The expansion in our loan portfolio particularly in infrastructure, real estate, mining and energy has helped us achieve our targets for the first quarter of 2012 and remains to be the key factors in fueling what we optimistically anticipate to be a good year,” Villarosa added.
Strong net interest income results in the first quarter of 2012 were partly due to the stable four percent net interest margin (NIM) which was achieved despite pricing pressure in both corporate and commercial banking segments.
Other income, meanwhile, decreased by P119 million brought about by the volatility of the foreign exchange, trading and securities portfolio.
The bank also reported a healthy increase in total operating income to P2.33 billion, an 11.7% growth from the same period last year.
Operating expenses excluding provisions for credit and impairment losses rose to P1.2 billion at the end of March 2012 or an increase of 17.8% partly due to the consolidation of expenses of Premiere Development Bank (PDB) which Security Bank acquired in February 2012.
Security Bank Chief Financial Officer Joselito Mape said that as the bank embarks towards a new growth phase in its core businesses as shown in its branch network expansion and the PDB acquisition, it will continue to emphasize discipline in its cost-controls, asset quality and credit criteria.
Despite the still challenging global banking environment, the bank posted a net income attributable to equity holders of the parent company for the first quarter of P1.1 billion, an 8.2% growth from the same period last year translating to a return on equity (ROE) of 14% for the first quarter of the current year.
Security Bank’s non-performing loans (NPL) ratio of 1.2% for the period remains among the best in the industry. NPL cover, meanwhile, was 264% at the end of the period while the Bank's capital base remains robust as reflected in a capital adequacy ratio of 18%.
In anticipation of an increase in credit demand, the bank successfully concluded a P5 billion offering of seven-year, long-term negotiable certificates of deposit (LTNCDs) to its retail and institutional clients in February 2012.
In 2011, Security Bank was cited as the Best Banking Group in the Philippines at the World Finance Awards and was rated the best bank by Asian Banker for achieving the highest return on assets in Asia, as well as the third strongest bank in the Philippines