Security Bank profit slips to P6.9 billion in 2021

MANILA, Philippines — Security Bank Corp.’s profit slipped by 6.7 percent to P6.9 billion last year from P7.4 billion in 2020 due to a one-time tax charge amounting to P1.2 billion under a new law that wiped out lower provisions and strong fourth quarter performance.

Without the one-time charge for deferred tax assets under Republic Act 11534 or the Corporate Recovery and Tax Incentives for Enterprises (CREATE), Security Bank said its profit before tax would have soared by 141 percent to P10.3 billion.

Security Bank reported a 10.4 percent drop in net interest income to P27.5 billion as net interest margin declined by 27 basis points to 4.43 percent.

Likewise, the bank’s total non-interest income fell by 53 percent to P9.4 billion due to the decrease in securities trading gain by P10 billion and the gains on disposal of investment securities at amortized cost by P2.2 billion.

On the other hand, service charges, fees and commissions jumped by 25 percent to P4.5 billion, with fee income sources rose from their year-ago levels.

Other non-interest income excluding securities trading gains and fee income surged by 34 percent to P3.7 billion.

Security Bank reported a 42.4 percent drop in total operating expenses to P26.55 billion as provision for credit losses plunged by 80 percent to P5.28 billion last year from P26.38 billion in 2020.

The bank’s gross non-performing loan (NPL) ratio stood at 3.94 percent, while its NPL reserve cover reached 93 percent.

Its loan booked inched up by one percent to P467 billion,d fueled by the 23 percent jump in retail loans and five percent increase in wholesale loans. The bank’s deposit base grew by 19 percent to P524 billion.

Security Bank continues to be among the country’s best capitalized private domestic universal banks, with a common equity tier 1 ratio of 19.1 percent and total capital adequacy ratio of 19.8 percent.

Total assets grew by seven percent to P700 billion, while shareholders’ capital inched up by one percent to P125 billion.

For the fourth quarter alone, Security Bank reported a 171 percent jump in net income to P2.1 billion on the back of the two percent increase in revenues to P9.3 billion.

From October to December last year, Security Bank said net interest income inched up by one percent to P7 billion, while total non-interest income went up  by seven percent to P2.4 billion.

Likewise, service charges, fees and commissions jumped by 24 percent to P1.3 billion.

On the other hand, operating expense during the quarter increased as it set aside P1.2 billion.

“Our fourth quarter results benefitted from the easing of mobility restrictions and the resulting uplift of the economy. We are optimistic about economic activity in 2022, despite the Omicron impact in January. The bank’s retail and wholesale teams are fully engaged to support our clients as the economy continues to reopen,” Security Bank president and CEO, Sanjiv Vohra said.

Security Bank has a total of 316 branches and 663 ATMs nationwide.