Security Bank Corporation posted a 66 percent jump in net income to P2.7 billion in the first quarter of 2022, driven by growth in core businesses, lower credit provisions and normalized income tax provisions.
In a disclosure to the Philippine Stock Exchange, the bank noted that, 2021 tax provisions were impacted by a one-time charge triggered by the passage of the CREATE Law.
Net interest income increased 5 percent to P7 billion. Net interest margin in the first quarter of 2022 was 4.19 percent, slightly down by 2 basis points year-on-year.
Total non-interest income likewise increased 8 percent to P2.3 billion. Service charges, fees and commissions grew 22 percent to P1.3 billion, led by increase in fees from deposits, capital market and credit cards.
Other non-interest income excluding securities trading gains and fee income rose 168 percent to P1 billion, driven mainly by recovery on charged-off assets and foreign exchange income.
Operating expense was 8 percent higher, driven by investments in technology and manpower to improve customer experience. The cost-to-income ratio was 58.96 percent compared to 57.6 percenta year ago.
Pre-provision operating profit was P3.8 billion, up 2 percent year-on-year. The Bank set aside P80 million as provisions for credit losses in the first quarter of 2022, a decrease versus year-ago level of P402 million.
Gross non-performing loan ratio decreased to 3.65 percent from 3.94 percent in the previous quarter. NPL reserve cover was 90 percent.
Return on shareholders’ equity increased to 8.81 percent from 5.38 percent a year ago. Return on assets likewise increased to 1.55 percent from 0.96 percent in the first quarter of 2021.
Low-cost savings and demand deposits grew 20 percent and increased to 61 percent of total deposits from 52 percent a year ago. This drove total deposits to grow 2 percent year-on-year to P530 billion.
Gross loans increased 8 percent year-on-year to P475 billion, driven by wholesale loans which grew 11 percent while retail loans decreased by 4 percent. Retail loans are 23 percent of total loans compared to 26 percent a year ago.
“Despite the Omicron impact in January, we are pleased with the improvement in client activity levels for the first quarter, particularly for our corporate and home loans teams,” said Security Bank President & CEO, Sanjiv Vohra.
He added that, “Various macro factors are unfolding in the coming months including: new government policy, the war in Ukraine, and central bank action on inflation, we are constructively engaged with our clients to help them navigate the current environment.”