Lower trading gains cut Security Bank’s profit in first half of 2018

MANILA, Philippines — Earnings of Security Bank Corp. declined by 18 percent to P4.3 billion in the first half from P5.2 billion in the same period last year due to the sharp drop in trading gains amid the volatile markets as well as the higher provision for income tax.

In a report to the Philippine Stock Exchange, Security Bank said trading gains plunged by 59 percent to P655 million from January to June, while provision for income tax jumped 55 percent or P424 million.

Net interest income from customer loans and deposits jumped 34 percent to P7.4 billion from P5.6 billion despite the 13 percent decline in interest income from financial investments to P4.8 billion on lower securities portfolio that contracted 13 percent.

Security Bank said its total net interest income climbed by eight percent to P10 billion.

Loans booked a double-digit growth of 12 percent to P383 billion as consumer loans surged 50 percent, while wholesale loans inched up seven percent.

The bank’s deposit base rose 17 percent to P443 billion as of end-June due to the 15 percent rise in low cost deposits. The loan-to-deposit ratio improved to 86 percent from 90 percent.

Service charges, fees, and commissions went up by 16 percent to P1.3 billion. The growth in fee income was broad-based, led by bancassurance, credit card, and loan fees.

Operating expense growth was nearly 13 percent, excluding provisions for credit and impairment losses, driven by the bank’s investment in digitalization and information technology transformation.