By James A. Loyola
Security Bank Corporation posted an 18 percent growth in net income to P7.7 billion in the first nine months of the year on the back of 22 percent profit growth in the third quarter to P2.7 billion.
In a disclosure to the Philippine Stock Exchange, the bank said net interest income from customer loans and deposits or peso bond issuance rose by 41 percent to P15.9 billion.
Interest income from financial investments increased by 7 percent to P7.8 billion. Total net interest income grew 23 percent to P18.9 billion.
Service charges, fees and commissions for the nine-month period increased by 45 percent to P2.9 billion. Securities trading gains totaled P1.4 billion. Total revenues amounted to P24.2 billion, up 29 percent.
Income before provision for credit losses and income tax in the nine-month period was P11.3 billion, up 31 percent versus year-ago level.
Asset quality remained healthy, with gross non-performing loan ratio at 1.4 percent, lower than industry’s 1.7 percent as of August 2019.
Under the new BSP regulations implemented last year requiring Expected Credit Loss (ECL) provisioning by banks, the Bank set aside P1.1 billion for provision for credit losses in the third quarter of 2019.
This brought provision for credit losses in the nine-month period to P1.75 billion. NPL reserve cover was 110 percent. Inclusive of reserves in Retained Earnings, NPL reserve cover was 146 percent.
Security Bank continues to be among the country’s best capitalized private domestic universal banks.
Common Equity Tier 1 Ratio further increased to 17.1 percent from 16.8 percent a quarter-ago.
Total Capital Adequacy Ratio was 18.0 percent, compared to 19.2 percent a quarter-ago, after the Bank exercised its option to call its P10 billion unsecured subordinated 10-year notes issued on July 11, 2014 (with 5.375 percent coupon, callable on July 12, 2019) representing Tier 2 capital.