Makati City, Philippines, 11 November 2013 – Security Bank Corporation (PSE: SECB) reported a net income attributable to equity holders of P4.2 billion in the first nine months of 2013. The return on shareholdersأ equity was 14.5%.
Total deposits increased by 33% year-on-year to P184 billion, with strong growth in low-cost deposits. The financial system was highly liquid with the release of Special Deposit Accounts (SDA) funds from the Bangko Sentral ng Pilipinas back to the banking sector. Loans grew by 34% year-on-year to P145 billion, funding various industries such as power, utilities, tollways and ports, as well as wholesale and retail trade, food and agriculture, consumer goods and other vital sectors of the economy. Total assets rose by 9% to P276 billion.
Eleven Security Bank branches were opened during the third quarter of 2013, bringing Security Bank groupأs network to 229 branches as of September 30, 2013. The universal bank has 191 branches and thrift bank subsidiary Security Bank Savings has 38 branches. Security Bank group’s branch network had increased by 68%, or by 93 branches, from 136 branches in early 2012, as the Bank executed its growth plan.
For the three-month period ended September 30, 2013, Security Bank earned P2.5 billion in net income. Net interest income during the quarter was P2.2 billion, up by 12% year-on-year and by 10% quarter-on-quarter. Non-interest income was P2.1 billion, with the Bank realizing P2 billion in trading gains during the quarter through sale of securities. These results further increased the Bankأs capital ratios, fortifying its position for the early implementation of Basel 3 in January 2014. Security Bankأs total capital adequacy ratio (CAR) increased to 19.5% as of September 30, 2013 from 18% a quarter ago and 18.2% a year ago. Tier 1 CAR increased to 17.6% from 16.2% a quarter ago and 16.2% a year ago.
For the first nine months of 2013, net interest income was P6.2 billion, up by 3% year-on-year. The net interest margin improved slightly to 3.6% from 3.5% of the first half of the year. Non-interest income during the nine month period was P3.4 billion, which is lower than the P5 billion a year ago due to higher securities trading gain of P3.7 billion during the prior year period. Service charges, fees and commissions grew by 20% year-on-year to P1.1 billion. Operating costs, excluding provisions for credit losses and impairments, grew by 14% year-on-year. The cost-to-income ratio was 52% for the period. The loan-to-deposit ratio was 79%. The gross non-performing loan (NPL) ratio was 0.53%, which is lower than the 0.59% a quarter ago and the 0.8% a year ago. The NPL reserve cover was 259%, compared to 266% a quarter ago and 236% a year ago.
Security Bank President and Chief Executive Officer Mr. Alberto S. Villarosa said, “The Bank is well positioned to support the long-term economic growth of our country. Our core revenues in the three-month period ending September 30, 2013 grew 13% year-on-year to P2.7 billion, and core revenues in the nine months period grew by 8% year-on-year to P8 billion. We will continue to focus on improving our core businesses in terms of volumes and margins even as we keep our balance sheet solid.”
Security Bank Chief Financial Officer Mr. Joselito E. Mape said, “The bulk of our investment spending for branch expansion is done, thus our operating expense growth year-on-year is decelerating, at 14% for the first nine months of 2013, coming from 16% in first half 2013 and 36% a year ago. Our capital build-up through retained earnings continues, with capital attributable to equity holders further increasing to P41 billion, up by 12% year-on-year and by 6% quarter-on-quarter. Security Bank’s book value per share is at P80.70, up by 6% from P75.82 a quarter ago and by 10% from P73.37 of December 2012.”