16 May 2022, Makati City, Philippines – Security Bank Corporation (PSE: SECB) posted a 66% yearover-year increase in net income to Php 2.7 billion in Q1-2022, driven by growth in core businesses, lower credit provisions and normalized income tax provisions. 2021 tax provisions were impacted by a one-time charge triggered by the passage of the CREATE Law.
Net interest income increased 5% to Php 7 billion. Net interest margin in Q1-2022 was 4.19%, slightly down by 2 basis points year-on-year. Total non-interest income likewise increased 8% to Php 2.3 billion. Service charges, fees and commissions grew 22% to Php 1.3 billion, led by increase in fees from deposits, capital market and credit cards. Other non-interest income excluding securities trading gains and fee income rose 168% to Php 1 billion, driven mainly by recovery on charged-off assets and foreign exchange income.
Operating expense was 8% higher, driven by investments in technology and manpower to improve customer experience. The cost-to-income ratio was 58.96% compared to 57.6% a year ago.
Pre-provision operating profit was Php 3.8 billion, up 2% year-on-year. The Bank set aside Php 80 million as provisions for credit losses in Q1-2022, a decrease versus year-ago level of Php 402 million. Gross non-performing loan ratio decreased to 3.65% from 3.94% in previous quarter. NPL reserve cover was 90%.
Return on shareholders’ equity increased to 8.81% from 5.38% a year ago. Return on assets likewise increased to 1.55% from 0.96% in Q1-2021.
Balance sheet remains strong
Low-cost savings and demand deposits grew 20% and increased to 61% of total deposits from 52% a year ago. This drove total deposits to grow 2% year-on-year to Php 530 billion.
Gross loans increased 8% year-on-year to Php 475 billion, driven by wholesale loans which grew 11% while retail loans decreased by 4%. Retail loans are 23% of total loans compared to 26% a year ago.
On a sequential quarter-on-quarter basis, gross loans grew 3% with both wholesale and retail loans increasing by 3% and 2%, respectively. Low-cost savings and demand deposits increased by 3%. Q1-2022 net income was 31% higher compared to previous quarter.
Security Bank continues to be among the country’s best capitalized private domestic universal banks. Common Equity Tier 1 Ratio was 18.1% and Total Capital Adequacy Ratio (CAR) was 18.6%. Total assets stood at Php 707 billion. Shareholders’ capital was at Php 122.5 billion, up 1%.
On March 29, 2022, Security Bank approved cash dividend declaration of Php 1.50 per common share representing regular semestral cash dividend, with payment date on April 28, 2022.
“Despite the Omicron impact in January, we are pleased with the improvement in client activity levels for the first quarter, particularly for our corporate and home loans teams. Various macro factors are unfolding in the coming months including: new government policy, the war in Ukraine, and central bank action on inflation, we are constructively engaged with our clients to help them navigate the current environment.” — Security Bank President & CEO, Sanjiv Vohra.
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About Security Bank
Security Bank is a private domestic universal bank in the Philippines with total assets of Php 700 billion as of December 31, 2021. The Bank has been operating for 70 years since it was established in 1951. Security Bank has a total of 316 branches and 660 ATMs to-date.
Security Bank was recently awarded in April 2022 with “Best for Mass Affluence/HNW in the Philippines 2022” award by Asiamoney. The Bank’s major citations in 2021 are: Philippines’ Best Bank by Euromoney; Best for HNWs (High Net Worth Clients) in the Philippines by Asiamoney; Best Retail Bank in the Philippines by Alpha Southeast Asia; and, Best Culture of Learning and Diversity Champion by LinkedIn Talent Awards.
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.