Security Bank Poised For Accelerated Growth After Posting Record Profit in 2015; Alliance Business Segment Created

 

26 April 2016, Makati, Philippines – During the annual stockholders’ meeting of Security Bank Corporation (PSE: SECB) on Tuesday, 26 April 2016, the stockholders ratified the 20% investment by The Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU) in Security Bank and approved the listing of the newly issued 150.7 million common shares with the Philippine Stock Exchange. Elected to the Security Bank Board during the stockholders’ meeting were Philip T. Ang (independent), Anastasia Y. Dy, Frederick Y. Dy, Takayoshi Futae, Joseph R. Higdon (independent), James JK Hung (independent), Takahiro Onishi, Alfonso L. Salcedo, Jr.,  Rafael F. Simpao, Jr.,  Paul Y. Ung and Alberto S. Villarosa as directors.  During the organizational Board meeting, key appointments were for Frederick Y. Dy as Chairman Emeritus, Alberto S. Villarosa as Chairman,  Paul Y. Ung as Vice Chairman, and Alfonso L. Salcedo, Jr. as President and Chief Executive Officer.

In his report on 2015 operations, President and CEO Mr. Alfonso L. Salcedo, Jr. highlighted the record-high net income of Php 7.7 billion which translated to a 15.2% return on shareholders’ equity (ROE). Security Bank continued to produce the highest ROE among private domestic universal banks in the country in 2015 as in previous years. While net interest income increased 11% and the net interest margin held steady at 3.3%, fee-based income grew 37% which is attributable to the growth in all segments especially from retail banking services including the new bancassurance business. The Bank also earned Php 2.1 billion in gain on the sale of investment securities. Core revenues grew by 15% to Php 15.5 billion. The cost-to-income ratio remained at an efficient 50%, among the best in the industry.

Also highlighted was Security Bank’s continuing solid growth. With total assets increasing 34% to Php 532 billion, Security Bank moved up to become the 5th largest private domestic universal bank at year-end 2015 from 8th largest in 2014. Loans increased 24% to Php 240 billion, faster than the industry’s 12%. Loan growth was driven by wholesale loans which grew 20% and consumer loans which increased 68% mainly from home and auto loans and credit card receivables. Deposits grew 17% to Php 290 billion, faster than the industry’s 8%. Asset quality remained healthy with net non-performing loan (NPL) ratio at 0.14%, lower than 2014 net NPL ratio of 0.28% and among the strongest in the industry. NPL reserve cover increased to 205% from 200% at end-2014, among the highest in the industry. During the year, Security Bank paid total cash dividends of Php 2.00 per share. This is the 14th consecutive year that the Bank has paid cash dividends.

“We have remained focused on our three priorities to create long-term value for our shareholders, which are: being more focused on our customers by giving them a BetterBanking experience; being better organized to service our customers while reducing structural costs; and seeking a balance in the contributions of our three business segments complemented by a robust risk management initiative. I am happy to report that these are resonating widely across the Bank allowing us to achieve an all-time-high net income in 2015. Equally important, we have made significant progress in growing our core revenues by executing our strategy of building the Retail Banking business to complement our existing strengths in Wholesale Banking and Financial Markets,” said Mr. Alfonso L. Salcedo, Jr.

Security Bank Chairman Mr. Alberto S. Villarosa said in response to shareholders’ questions, “With our strategic partnership with BTMU, Security Bank is poised for accelerated growth in 2016 and beyond, given our bigger capital of over Php 90 billion and the business collaboration with BTMU. We have made the first key steps in business collaboration, among which is the creation of the Alliance business segment.  We have appointed Director Takahiro Onishi as Executive Vice President and Head of Alliance Segment reporting to the President and CEO. The new business segment is focused on exploring opportunities for the growth of Japanese and related businesses for Security Bank.”

Security Bank is further strengthening its risk management, compliance and audit resources and capabilities to ensure that growth will not result in asset quality deterioration as well as to continue to shield the Bank from various risks including money laundering and reputational risks and potential regional contagion effects.

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