By James A. Loyola
Security Bank Corporation posted a 16 percent decline in net income to P8.6 billion last year from P10.3 billion in 2017 due to lower trading gains and higher taxes.
In a disclosure to the Philippine Stock Exchange, the bank said a key component of its earnings is net interest income from customer loans and deposits, which increased by 30 percent to P15.7 billion.
This was driven by the continued expansion of consumer loans and low-cost deposits.
Consumer loans grew 47 percent while low-cost deposits increased 15 percent. Consumer loans now account for 20 percent of total loans versus 16 percent a year ago.
Total loans increased 12 percent to P416 billion while wholesale loan growth was 7 percent. Total deposits increased 18 percent to P489 billion.
Interest income from financial investments was lower by 11 percent mainly due to a lower level of investment securities at amortized cost. Total net interest income grew by 7 percent to P20.8 billion.
Service charges, fees and commissions increased by 26 percent to P2.9 billion. This was driven by credit card, bancassurance, loan fees and deposit charges.
The decrease in trading gains by 85 percent or P2 billion and the increase in provision for income tax by 47 percent or P790 million primarily accounted for the Bank’s lower net income in 2018.
Asset quality remained healthy, with gross non-performing loan (NPL) ratio at 0.7 percent. Provision for credit losses was P714 million.
NPL reserve cover was 112 percent, computed using the new BSP Circular 1011 guidelines on loan loss provisions which the Bank adopted in September 2018.
Security Bank continues to be among the country’s best capitalized private domestic universal banks.