Security Bank Corporation posted 28 percent drop in net profit to P4.8 billion in the first nine months of 2021 from the P6.7 billion earned in the same period last year which was marked by strong trading gains.
In a disclosure to the Philippine Stock Exchange, the bank said its profit before tax was P7.6 billion, up 10 percent from the same period last year.
Net interest income was P20.5 billion, down 12 percent from year-ago level while total non-interest income was P7.0 billion, down 59 percent as 2020 was buoyed from extraordinary securities trading gains.
Service charges, fees and commissions increased 24 percent to P3.2 billion, with fee income sources increasing from their year-ago levels. Other non-interest income excluding securities trading gains grew 45 percent to P2.7 billion.
Operating expense was slightly up by 2 percent from the same period last year, driven by investments in technology and manpower to improve customer experience.
Pre-provision operating profit was P11.7 billion. The Bank set aside P4.1 billion as provisions for credit losses in the first nine months of 2021, a significant decrease versus year-ago level of P21.1 billion.
Gross non-performing loan ratio was 4.15 percent while NPL reserve cover was 91 percent.
“We are optimistic on the improvements in the economic and health data over the past few weeks and the subsequent steps taken to open the economy. The Bank is well positioned to support our clients as they recover from the pandemic impact,” said Security Bank President & CEO Sanjiv Vohra.
For the period July 1 to September 30, 2021, net income was P1.7 billion, 16 percent higher than quarter-ago level. On a sequential quarter-on-quarter basis, net interest income was P6.9 billion, consistent with previous quarter.
Net interest margin in the third quarter of 2021 was 4.32 percent, up 3 basis points quarter-on-quarter and down 58 basis points year-on-year.
Total non-interest income decreased 16 percent to P2.2 billion. Service charges, fees and commissions was at the P1.1 billion level, same as quarter-ago. Other non-interest income excluding securities trading gains grew 5 percent to P1.2 billion.
In the third quarter of 2021, the Bank set aside P1.6 billion as provisions for credit losses as the pandemic continues to impact the commercial loan portfolio. Pre-provision operating profit was P3.7 billion, 12 percent lower than quarter-ago level.
Low-cost savings and demand deposits increased 17 percent from year-ago level, and account for 58 percent of total deposits, while high-cost deposits increased 24 percent. Total deposits increased 20 percent to P522 billion.
Gross loans stood at P449 billion, down 1 percent from year-ago level. Gross retail loans decreased 12 percent year-on-year, and account for 25 percent of total loans, while wholesale loans increased 3 percent from year-ago level.