06 November 2017, Makati, Philippines – Security Bank Corporation (PSE: SECB) posted Php 7.4 billion in net income in the first nine months of 2017, up 12% from year-ago level. This result was driven by a 24% or Php 2.8 billion increase in net interest income to Php 14.3 billion. Non-interest income including trading gains was Php 3.5 billion, a 15% or Php 0.6 billion decrease.
For the third quarter alone from July 1 to September 30, 2017, net income increased 21% from year-ago level to Php 2.14 billion, driven by a 22% growth in net interest income to Php 5 billion.
The growth in net interest income was on the back of a 38% year-on-year increase in loans to Php 370 billion and a 44% increase in deposits to Php 431 billion. Low-cost deposits grew 22%. Wholesale loans grew 36%, of which corporate loan growth was 39% and middle market loan growth was 32%. Consumer loans increased 67%. Consumer loans accounted for 14% of total loans. Net interest margin was 3.2% in the third quarter of 2017, same as in previous quarter and higher than the 3.1% at year-end 2016. Service charges, fees and commissions were up 2% to Php 1.6 billion.
Operating expenses, excluding provisions for credit and impairment losses, were up 17%. This was driven by a 22% increase in manpower cost with the staffing of new branches, retail lending and e-commerce platforms. 19 new branches were opened in the last 12 months from October 2016 to September 2017, inclusive of the 8 new branches opened in the first nine months of this year. Depreciation and amortization and software costs increased 40% due to the major information technology upgrade and branch network expansion. The cost-to-income ratio was 50.6%.
It has been a quality growth for Security Bank. Asset quality remained firm with net non-performing loan ratio (NPL) of 0.11%. NPL reserve cover was 220%. Total assets increased 17% to Php 796 billion. Shareholders’ capital was Php 103 billion, up 8%. Return on average shareholders’ equity (ROE) was 9.8%. Return on average assets was 1.5%. Common Equity Tier 1 ratio was 16.2% and total Capital Adequacy Ratio was 18%. The book value per share was Php 136.81 as of September 30, 2017, up 8% from year-ago level.
On October 27, 2017, Security Bank’s Board of Directors approved cash dividends of Php 1.50 per share representing regular semestral cash dividend of Php 1.00 per share and a special cash dividend of Php 0.50 per share, with record date on November 17 and payment date on November 24 this year. This will bring the total cash dividends for the year to Php 3.00 per share. The Bank had earlier paid cash dividends for the first semester of Php 1.50 per share on May 25 this year.
Security Bank has 298 branches and 694 ATMs to-date.