Security Bank earns 8% more in H1

MANILA, Philippines - Earnings of Security Bank Corp. climbed 8.1 percent in the first half after a strong rebound in its core businesses in the second quarter.

The country’s fifth largest private-owned bank told the Philippine Stock Exchange (PSE) it booked a net income of P5.24 billion from January to June, P390 million higher than the P4.85 billion recorded in the same period last year.

The listed bank attributed the increase in net profit to the 26 percent rise in net interest income to P9.3 billion in the first half, enough to offset the 15 percent decline in non-interest income to P2.9 billion due to lower trading gains.

Security Bank said its loan book surged 27 percent to P340 billion as wholesale portfolio including corporate and middle market loans grew 27 percent while consumer loans zoomed 49 percent.

On the other hand, the bank’s deposit base rose 26 percent to P380 billion in the first half as low-cost deposits went up 21 percent.

The bank’s service charges, fees and commissions grew four percent to P1.1 billion.

Meanwhile, Security Bank’s operating expense, excluding provisions for probable credit losses and impairments went up 16 percent, driven by manpower cost growth of 23 percent as new branches, retail lending and e-commerce platforms were staffed.

Security Bank opened 25 new branches in the first half, bringing its total footprint to 296 branches and 667 ATMs.

The bank also invested heavily in information technology – both hardware and software – and branch network expansion resulting in a 44 percent increase in depreciation and amortization and software costs.

“Security Bank is in the midst of upgrading its core banking systems to enable the bank to roll out new products and services,” it said.

For the second quarter alone, the bank’s net profit grew 31.3 percent to P2.43 billion from P1.95 billion in the same quarter last year. This was a sharp improvement from the 6.7 percent decline in net income registered in the first quarter.

The bank’s total assets increased 26 percent to P775 billion in end-June this year.

The family of businessman Frederick Dy and the Bank of Tokyo – Mitsubishi UFJ Ltd. jointly own Security Bank. Japan’s largest bank pumped in P37 billion in fresh equity for a 20 percent stake in the bank last year.