Security Bank Corporation posted a 26 percent drop in net income to P7.4 billion last year from the P10.1 billion earned in 2019 due to higher provisions.
In a disclosure to the Philippine Stock Exchange, the firm said total revenues jumped 48 percent to P50.4 billion from the previous year, driven by increases in net interest income and trading gains.
Pre-provision operating profit (PPOP) was P30.7 billion, 85 percent higher than year-ago level.
Total net interest income grew 14 percent to P30.6 billion from year-ago level. Net interest margin for the full year was 4.77 percent, up by 84 basis points year-on-year.
Securities trading gains totaled P13.4 billion, significantly higher than P1.5 billion a year ago. Service charges, fees and commissions amounted to P3.6 billion, lower by 11 percent.
Miscellaneous income was up 249 percent to P1.7 billion, boosted by Bank of Ayudhya’s (Krungsri”) purchase of a 50 percent stake in SB Finance Company, Inc. (SB Finance), Security Bank’s consumer finance subsidiary.
Amidst the continuing economic impact of the COVID-19 pandemic, the Bank set aside P26.4 billion as provisions for credit losses in 2020, a significant increase versus year-ago level of P4.2 billion.
Gross non-performing loan ratio was 3.90 percent, down from 4.03 percent in the third quarter of 2020. NPL reserve cover was 115 percent.
Allowance for credit losses as percent of total loans increased to 4.70 percent from 1.30 percent a year ago.
Low-cost savings and demand deposits grew 19 percent and increased to 60 percent of total deposits, up from 45 percent a year ago. High-cost deposits decreased 37 percent but total deposits decreased 12 percent year-on-year to P440 billion.
Gross loans stood at P460 billion, up 1 percent versus year-ago. Retail loans were down 10 percent year-on-year.
Retail loans are 25 percent of total loans versus 28 percent a year ago. Wholesale loans increased 3 percent year-on-year.
“Our 2020 results reflect the fundamental strength of Security Bank amidst a very challenging pandemic-impacted environment,” said Security Bank President and CEO Sanjiv Vohra.
He added that, “Our retail and wholesale teams maintained their steadfast support of our core clients. Our financial markets team nimbly navigated significant market movements. We supported our employees through the necessary operating model pivots as well as fortified the Bank’s balance sheet with credit provisions.”