Security Bank grows first-half earnings by double-digit despite pandemic
In this undated photo, a banking client enters a branch of Security Bank (PSE: SECB), recently named Best Bank in the Philippines by New York-based Global Finance.
AFP, file
Security Bank grows first-half earnings by double-digit despite pandemic
Ian Nicolas Cigaral (Philstar.com) - August 13, 2020 - 6:20pm

MANILA, Philippines — Listed lender Security Bank Corp. on Thursday reported higher earnings in the first half, defying a pandemic-led slump on the back of hefty trading gains that offset costs from setting aside higher loan loss provisions.

In a disclosure to the stock exchange, Security Bank said profits amounted to P5.7 billion from January to June, up 14% year-on-year. In the second quarter alone, the lender's net income jumped 8% annually to P2.8 billion.

"We are carrying forward the momentum from Q1-2020 (first quarter), taking advantage of market opportunities for trading gains, along with prudent growth in the underlying core businesses," Sanjiv Vohra, company president and chief executive, said in a statement.

Shares in Security Bank closed up 3.34% at P95.90 each on Thursday.

Broken down, six-month revenues climbed 68% on-year to P25.9 billion, resulting into a 39.7% improvement in cost-to-income ratio from 53.7% a year ago. Retail loans, which accounted for 27% of total credit, rose by a quarter annually, while wholesale loans picked up at a slower pace of 4%.

Net interest income surged 34% to P15.8 billion during the same period, with securities trading up a whopping 620% from year-ago levels to P7.2 billion.

On the flip side, service charges, fees and commissions decreased a tenth to P1.7 billion after the three-month Luzon lockdown to arrest coronavirus spread closed down some branches and disrupted operations.

To protect its balance sheet from a potential build-up of unpaid loans from borrowers affected by the pandemic, Security Bank set aside P11 billion as provisions for credit losses in the first half, more than 11 times up from P639 million allocated same period last year. 

That said, based on financial results, only 1.58% of Security Bank's loan portfolio was considered soured, or unsettled credit 30 days past due, in the first half, all while resources to cover potential losses increased to account for 174% of present bad loans.

"As we expect the impact of the pandemic on our loan portfolio will continue to unfold over the coming quarters, we have adopted a proactive stance on our provisions," Vohra said.

"In spite of that, our balance sheet remains strong and allows us to invest in our transformation initiatives which help us deliver BetterBanking to our clients during these challenging times," he added.

LUZON LOCKDOWN NOVEL CORONAVIRUS SECURITY BANK CORP.
Philstar
  • Latest
  • Trending
Latest
Are you sure you want to log out?
X
Login

Philstar.com is one of the most vibrant, opinionated, discerning communities of readers on cyberspace. With your meaningful insights, help shape the stories that can shape the country. Sign up now!

FORGOT PASSWORD?
SIGN IN
or sign in with