12 November 2021, Makati City, Philippines – Security Bank Corporation (PSE: SECB) posted net profit of Php 4.8 billion in the first nine months of 2021. Profit before tax was Php 7.6 billion, up 103% from the same period last year.
Net interest income was Php 20.5 billion, down 12% from year-ago level. Total non-interest income was Php 7.0 billion, down 59% as 2020 was buoyed from extraordinary securities trading gains. Service charges, fees and commissions increased 24% to Php 3.2 billion, with fee income sources increasing from their year-ago levels. Other non-interest income excluding securities trading gains grew 45% to Php 2.7 billion.
Operating expense was slightly up by 2% from the same period last year, driven by investments in technology and manpower to improve customer experience. The cost-to-income ratio was 57.3%.
Pre-provision operating profit (PPOP) was Php 11.7 billion. The Bank set aside Php 4.1 billion as provisions for credit losses in the first nine months of 2021, a significant decrease versus year-ago level of Php 21.1 billion.
Gross non-performing loan ratio was 4.15%. NPL reserve cover was 91%.
Return on shareholders’ equity was 5.20%.
For the period July 1 to September 30, 2021, net income was Php 1.7 billion, 16% higher than quarter-ago level. On a sequential quarter-on-quarter basis, net interest income was Php 6.9 billion, consistent with previous quarter. Net interest margin in Q3-2021 was 4.32%, up 3 basis points quarter-on-quarter and down 58 basis points year-on-year. Total non-interest income decreased 16% to Php 2.2 billion. Service charges, fees and commissions was at the Php 1.1 billion level, same as quarter-ago. Other non-interest income excluding securities trading gains grew 5% to Php 1.2 billion.
Operating expense in Q3-2021 was higher by 2% versus quarter-ago.
In Q3-2021, the Bank set aside Php 1.6 billion as provisions for credit losses as the pandemic continues to impact the commercial loan portfolio. Pre-provision operating profit was Php 3.7 billion, 12% lower than quarter-ago level.
Balance sheet remains strong
Low-cost savings and demand deposits increased 17% from year-ago level, and account for 58% of total deposits. High-cost deposits increased 24%. Total deposits increased 20% to Php 522 billion.
Gross loans stood at Php 449 billion, down 1% from year-ago level. Gross retail loans decreased 12% year-on-year, and account for 25% of total loans, while wholesale loans increased 3% from year-ago level.
On a quarter-on-quarter basis, gross loans grew 1% with wholesale loans up 2% and retail loans down 3%, while low-cost savings and demand deposits increased by 5% versus quarter-ago level.
Security Bank continues to be among the country’s best capitalized private domestic universal banks. Common Equity Tier 1 Ratio was 19.5%, up from 19.0% a year ago. Total Capital Adequacy Ratio was 20.1%, up from 19.9% a year ago. Total assets stood at Php 699 billion. Shareholders’ capital was at Php 125 billion, up 1% quarter-on-quarter.
On October 26, 2021, the Bank’s Board of Directors approved the second semestral cash dividend of Php 1.50 per common share with payment date on November 24, 2021. The full amount of the second semestral cash dividend is regular cash dividends. This will bring the total cash dividends for the year to Php 3.00 per common share for a dividend payout ratio of 30.4% of 2020 net income. The Bank had earlier paid cash dividends for the first semester of Php 1.50 per common share on April 29, 2021. For the first semestral cash dividend, Php 1.00 was regular cash dividend and Php 0.50 was special dividend.
“We are optimistic on the improvements in the economic and health data over the past few weeks and the subsequent steps taken to open the economy. The Bank is well positioned to support our clients as they recover from the pandemic impact.” — Security Bank President & CEO, Sanjiv Vohra.
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About Security Bank
Security Bank is the eighth largest private domestic universal bank in the Philippines by total assets (at Php 703 billion) as of June 30, 2021. The Bank has been operating for 70 years since it was established in 1951. Security Bank has a total of 316 branches and 719 ATMs to-date.
Security Bank’s major citations in 2021 are: Philippines’ Best Bank by Euromoney; Best for HNWs (High Net Worth Clients) in the Philippines by Asiamoney; and Best Retail Bank in the Philippines by Alpha Southeast Asia.
Major awards 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.
Major awards received in 2019 are: The Best Retail Bank in the Philippines 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 by Alpha Southeast Asia and Best SME Bank in the Philippines by Alpha Southeast Asia; and Best Bank for SMEs in the Philippines by Asiamoney.
More information is available on our website: www.securitybank.com.