SECURITY BANK Posts 17% growth in 1Q 2014 Net Income at Php 1.43 billion

12 May 2014, Makati, PhilippinesSecurity Bank Corporation (PSE: SECB) earned Php 1.43 billion in net income, representing 17% year-on-year growth. This was driven by 42% year-on-year growth in net interest income to Php 2.8 billion, which was anchored on the expansion in loans and investment securities. Net interest margin improved to 3.54% in Q1-2014, up quarter-on-quarter from 3.33% in Q4-2013 and slightly up from 3.49% average in 2013.

Non-interest income contributed Php 790 million. Fees and commissions was at Php 361 million, up 11% quarter-on-quarter. Trading gains was Php 320 million in Q1-2014.

Security Bank’s total operating income increased by 17% year-on-year while operating cost (excluding provisions for credit losses and impairments), grew by 4.1%. Pre-provision-and-impairment income was at Php 1.84 billion, representing 32% year-on-year increase. The Bank made Php 133 million in credit provisions. The non-performing loan (NPL) ratio was at 0.06% in Q1-2014, down from 0.11% at year-end 2013, which is among the lowest in the banking industry. NPL reserve cover was at 198% in Q1-2014, up from 195% at year-end 2013, which is among the highest in the industry.

Security Bank’s total resources increased by 46% year-on-year to Php 377 billion as of March 31, 2014. Loans grew by 39% year-on-year while deposits increased by 49%. The loan-to-deposit ratio is at 78.8%. The investment securities portfolio increased by 132% year-on-year and 57% quarter-on-quarter.

The Bank’s return on shareholders’ equity was at 13.8% and the return on assets was at 1.6% in Q1-2014.

Security Bank President and Chief Executive Officer Mr. Alberto S. Villarosa said, “Our core businesses continue to grow alongside the healthy economy. Our net margin has improved and our asset quality remains superior. There is healthy demand for the Bank’s services across all our customer segments.”

Security Bank Chief Financial Officer Mr. Joselito E. Mape said, “Our cost efficiency is improving, with cost-to-income ratio at 48% in Q1-2014 from 55% in 2013. We made major investments in branch network and retail bank expansion in the last two years, which elevated our cost-to-income ratio during that period. Our capital level under Basel 3 is healthy, with Tier 1 CAR at 13.5% and Total CAR at 14%.”

Security Bank plans to issue Basel 3 compliant Tier 2 bonds to tap into value-adding opportunities in the market and fuel the Bank’s growth.

In 2014, Security Bank was recipient of awards such as Best Cash Management Solution and Best Service Provider and e-Solutions Partner Bank in the Philippines by The Asset, Excellence in Payment Innovation by The Retail Banker International, Best Investor Relations Company and Best CEO (Investor Relations) by Corporate Governance Asia of Hong Kong; and cited as Best Investor Relations Company by FinanceAsia.  In 2013, Security Bank was Best Managed Bank in the Philippines by The Asian Banker; Best Domestic Bank, Best Domestic Debt House and Best Overall Domestic Provider of FX Services in the Philippines by Asiamoney; and Best e-Banking Implementation Solution in the Philippines for Cebu Pacific Air and Best Service Provider and e-Solutions Partner Bank in the Philippines” by The Asset.