Security Bank Corporation posted a decline of 13 percent in net income to P6.7 billion in the first nine months of 2020 from P7.7 billion in the same period last year as higher provisions offset increases in net interest income and trading gains.
In a disclosure to the Philippine Stock Exchange, the bank said total revenues increased 66 percent to P40.2 billion from the same period last year. Excluding trading gains, total revenues grew 22 percent to P27.9 billion.
Total net interest income grew 24 percent to P23.4 billion from year-ago level. Securities trading gains totaled P12.4 billion, significantly higher than P1.4 billion a year ago. Service charges, fees and commissions amounted to Ph2.6 billion, lower by 10 percent.
Pre-provision operating profit (PPOP) was P24.8 billion, 120 percent higher than year-ago level. PPOP in the third quarter of 2020 was P9.2 billion, 120 percent higher than in the same period last year.
The Bank set aside P21.1 billion as provisions for credit losses in the first nine months of 2020, a significant increase versus year-ago level of P1.8 billion.
Gross non-performing loan ratio was 4.03 percent, up from 1.58 percent in the second quarter of 2020, given challenges arising from the pandemic and the resulting economic impact. NPL reserve cover was 122 percent.
Allowance for credit losses as percent of total loans increased to 4.99 percent from 1.31 percent a year ago and 3.24 percent a quarter ago.
“While revenues, margins, and capital are resilient, the Bank has maintained proactive credit provisioning given economic challenges arising from the pandemic. We are prudently supporting our clients, continuing vigilance in managing risks, and investing in initiatives to fortify our services,” said Security Bank President Sanjiv Vohra.
For the period July 1 to September 30, 2020, net income was P1.0 billion from P2.74 billion a year ago even as total revenues increased 64 percent to P14.4 billion. Excluding trading gains, total revenues grew 9 percent to P9.2 billion from the same period last year.
Total net interest income in the third quarter of 2020 increased 8 percent versus prior year to P7.6 billion. Net interest margin in was 4.90 percent, up 88 basis points year-on-year and 26 basis points quarter-on-quarter.
Total non-interest income surged 286 percent to P6.8 billion. Securities trading gains soared to P5.2 billion from P369 million in the third quarter of 2019.