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Security Bank profit dips 11% to P6.5 billion

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By James A. Loyola

Security Bank Corporation reported an 11 percent drop in net income to P6.5 billion for the first nine months of the year primarily due to the decrease in trading gains and higher income tax.

Security Bank logo (Courtesy of securitybank.com)

Security Bank logo (Courtesy of securitybank.com)

In a disclosure to the Philippine Stock Exchange, the bank said its trading gains fell by 57 percent or P627 million while provision for income tax jumped 73 percent or P769 million.

Total net interest income grew by 7 percent to P15.3 billion as net interest income from customer loans and deposits increased by 30 percent to P11.3 billion in the first nine months of 2018.

However, interest income from financial investments was lower by 13 percent or P1.1 billion due to a lower level of securities portfolio which decreased by 18 percent year-on-year.

Service charges, fees and commissions for the nine-month period increased by 23 percent to P1.98 billion. Operating expense growth was 13 percent (excluding provisions for credit and impairment losses). Cost-to-income ratio was 54 percent.

Asset quality remained healthy, with gross non-performing loan (NPL) ratio at 0.7 percent. Provision for credit losses was P227 million for the nine-month period.

NPL reserve cover was 120 percent, computed using the new BSP Circular 1011 guidelines on loan loss provisions which the bank adopted in September 2018.

For the third quarter of 2018, Security Bank posted P2.25 billion in net income, up 5 percent from year-ago level and up 15 percent from quarter-ago.

A key driver for the earnings growth was the continued expansion of the Bank’s consumer loans and low-cost deposits. Consumer loans grew 48 percent year-on-year while low-cost deposits increased 18 percent.

Net interest income from customer loans and deposits for the quarter increased 23 percent year-on-year.

Service charges, fees and commissions grew 38 percent, driven by bancassurance, credit card, deposit charges and loan fees.

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