2 March 2021, Makati City, Philippines – Security Bank Corporation (PSE: SECB) posted net income of Php 7.4 billion in 2020, driven by increases in net interest income and trading gains.
Total revenues increased 48% to Php 50.4 billion from the same period last year. Pre-provision operating profit (PPOP) was Php 30.7 billion, 85% higher than year-ago level.
Total net interest income grew 14% to Php 30.6 billion from year-ago level. Net interest margin for the full year was 4.77%, up by 84 basis points year-on-year. Securities trading gains totaled Php 13.4 billion, significantly higher than Php 1.5 billion a year ago. Service charges, fees and commissions amounted to Php 3.6 billion, lower by 11%. Miscellaneous income was up 249% to Php 1.7 billion, boosted by Bank of Ayudhya’s (“Krungsri”) purchase of a 50% stake in SB Finance Company, Inc. (SB Finance), Security Bank’s consumer finance subsidiary. Krungsri and Security Bank’s strategic partnership is focused on innovating in the personal loan segment in the Philippines and extending novel financing solutions to the segments in need.
The cost-to-income ratio improved to 39.1% from 51.1% a year ago.
Amidst the continuing economic impact of the COVID-19 pandemic, the Bank set aside Php 26.4 billion as provisions for credit losses in 2020, a significant increase versus year-ago level of Php 4.2 billion. Gross non-performing loan ratio was 3.90%, down from 4.03% in Q3-2020. NPL reserve cover was 115%. Allowance for credit losses as percent of total loans increased to 4.70% from 1.30% a year ago.
Return on shareholders’ equity was 6.16%. Return on assets was 1.03%.
Balance sheet remains strong
Low-cost savings and demand deposits grew 19% and increased to 60% of total deposits, up from 45% a year ago. High-cost deposits decreased 37%. Total deposits decreased 12% year-on-year to Php 440 billion.
Gross loans stood at Php 460 billion, up 1% versus year-ago. Retail loans were down 10% year-on-year. Retail loans are 25% of total loans versus 28% a year ago. Wholesale loans increased 3% year-on-year.
“Our 2020 results reflect the fundamental strength of Security Bank amidst a very challenging pandemic-impacted environment. Our retail and wholesale teams maintained their steadfast support of our core clients. Our financial markets team nimbly navigated significant market movements. We supported our employees through the necessary operating model pivots as well as fortified the Bank’s balance sheet with credit provisions.” — Security Bank President & CEO, Sanjiv Vohra.
Security Bank continues to be among the country’s best capitalized private domestic universal banks. Common Equity Tier 1 Ratio increased to 19.2% from 16.9% a year ago. Total Capital Adequacy Ratio (CAR) likewise increased to 20.1% from 17.9% a year ago. Total assets stood at Php 653 billion, down 18% year-on-year. Shareholders’ capital was at Php 123 billion, up 4%.
About Security Bank
Security Bank is the eighth largest private domestic universal bank in the Philippines by total assets (at Php 650.8 billion) as of September 30, 2020. The Bank has been operating for 69 years since it was established in 1951. Security Bank has a total of 313 branches and 787 ATMs to-date.
Security Bank’s major citations in 2020 are: The Strongest Bank in the Philippines in 2020 by The Asian Banker; Best Bank in the Philippines for 2020 by The Lafferty Group (The Statement Magazine); and Best Retail Bank in the Philippines in 2020 by Alpha Southeast Asia.
Security Bank’s major awards received in 2019 are: The Best Retail Bank in the Philippines for 2019 by The Asian Banker and Deposit Product of the Year – “All Access Account” by The Asian Banker; Automobile Lending Product of the Year by The Asian Banker (Philippines Awards 2019) and Deposit Product of the Year by The Asian Banker (Philippine Awards 2019); Best Bank in the Philippines in 2019 by Alpha Southeast Asia and Best SME Bank in the Philippines in 2019 by Alpha Southeast Asia; and Best Bank for SMEs in the Philippines in 2019 by Asiamoney.
Major awards received in 2018 were: Bank of the Year – Philippines 2018 by The Banker; Best Bank in the Philippines 2018 by Global Finance; The Best Retail Bank in the Philippines for 2018 by The Asian Banker; Best Retail Bank in the Philippines 2018 by Alpha Southeast Asia; and People Program of the Year Award for Security Bank’s Total Wellness Program by People Management Association of the Philippines (PMAP).