Security Bank earns record P8.6 B in 2016

MANILA, Philippines -  Security Bank Corp. recorded a record profit of P8.55 billion last year on the back of the strong growth in core recurring income, less than a year after the Bank of Tokyo – Mitsubishi UFJ Ltd. (BTMU) pumped in fresh equity into the bank.

Alfonso Salcedo Jr., Security Bank president and CEO, yesterday said the bank was pleased with the quality of its earnings last year which was 11 percent higher than the P7.75 billion recorded in 2015.

“Our 2016 results show steady progress in our core recurring income. The growth in our net interest income more than offset the lower trading gains,” Salcedo said.

The bank’s net interest income increased 28 percent to P15.9 billion, wiping out the P1.1 billion decline in trading gains to P1.8 billion.

For the fourth quarter, Security Bank’s net income increased 18 percent to P1.9 billion, driven by a 30 percent jump in net interest income to P4.4 billion.

“Notably, the growth in our net interest income has accelerated to 30 percent year-on-year in the fourth quarter last year from 28 percent in previous quarters,” he said.

The bank reported its total loans and investments in corporate bonds increased 25 percent P317 billion. Corporate, commercial and retail customer loans increased 20 percent to P289 billion.

On the other hand, deposits grew 20 percent to P347 billion, with low-cost deposits increasing 20 percent.

Loan growth continued its trajectory by segment with corporate and commercial loans growing 20 percent and total consumer loans increasing 56 percent.

Security Bank said credit card receivables decreased five percent due to the sale of the Diners Club franchise.

Retail loans account for 13 percent of total loan portfolio, up from 10 percent in 2015.

Asset quality remained healthy, with net non-performing loan (NPL) ratio at 0.44 percent, which is among the lowest in the industry. Gross NPL ratio was steady at 0.8 percent while NPL reserve cover stood at 170 percent.

Notwithstanding the healthy asset quality, Security Bank increased its provision for probable credit losses by 52 percent to P953 million.