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May 27, 2024

Security Bank Q1 profit zooms 66% to P2.7B

The earnings of Security Bank Corp. led by bankero Sanjiv Vohra zoomed 66 percent to P2.8 billion in the first quarter of the year on the back of the robust core businesses, lower credit provisions, as well as normalized income tax provisions.

“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. 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,” the bankero said.

The bank’s net interest income increased by five percent to P7 billion despite the two basis points decline in net interest margin to 4.19 percent, while total non-interest income went up by eight percent to P2.3 billion.

Security Bank said service charges, fees and commissions jumped by 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 surged 168 percent to P1 billion, driven mainly by recovery on charged-off assets and foreign exchange income.

Operating expense was eight percent higher to P5.5 billion, driven by investments in technology and manpower to improve customer experience. The cost-to-income ratio was 58.9 percent compared to 57.6 percent a year ago.

The listed bank set aside P80 million as provisions for credit losses in the first quarter of the year versus year-ago level of P402 million resulting to a non-performing loan (NPL) coverage of 90 percent.

According to Security Bank, it expects provisioning to hit P4 billion this year or the same level as in 2021.

Security Bank’s gross non-performing loan ratio improved to 3.65 percent from 3.94 percent.

Low-cost savings and demand deposits grew 20 percent, bringing the total deposits to P530 billion or two percent higher than a year-ago level.

Gross loans increased eight percent year-on-year to P475 billion, driven by wholesale loans that grew 11 percent offsetting the four percent decline in retail loans.