Security Bank Q2 net income up 10%
SECURITY BANK Corp. saw its net income rise by 10.19% in the second quarter as it booked higher revenues.
The lender’s net income stood at P2.82 billion in the three months ended June, up from P2.56 billion in the same period last year, its financial statement disclosed to the stock exchange on Wednesday showed.
“Our second-quarter results reflect accelerating velocity for our retail, MSME (micro, small and medium enterprises) and wholesale client teams. We allocated substantial resources to support our clients’ aspirations as indicated in the growth of loans and deposits. Likewise, we continue to invest in technology to improve customer experience, security and agility,” Security Bank President & Chief Executive Officer Sanjiv Vohra said in a statement.
The bank’s second-quarter performance brought its first-half net income to P5.44 billion, up by 10.77% from P4.92 billion in the same period last year, “driven by accelerated growth in business drivers,” it said.
This translated to a return on average assets and return on average equity of 1.2% and 7.94%, respectively.
Net interest income grew by 31.87% to P10.93 billion in the second quarter from P8.29 billion in the same period a year prior, driven mainly by higher interest earnings from loans and receivables and lower interest expenses on deposits.
Net interest margin stood at 5.2% at end-June, up from 4.24% a year ago.
“Total non-interest income was P2.2 billion, up 28% quarter on quarter. Service charges, fees and commissions was P1.8 billion, up 19% year-on-year,” Security Bank said.
As a result, its total operating income rose by 21.77% to P13.18 billion last quarter from P10.82 billion a year prior.
Meanwhile, Security Bank’s operating expenses went up by 25.85% year on year to P9.19 billion from P7.299 billion.
This came as it set aside P1.79 billion in provisions for credit losses in the period, up by 81.54% from P983.4 million a year prior. It also booked higher expenses for compensation and fringe benefits and taxes and licenses, among others.
The bank’s cost-to-income ratio stood at 58.44% at end-June, down from 60.35% a year ago.
Net loans increased by 7.23% to P577.26 billion at end-June from P538.33 billion at end-2023.
“Net loans accelerated to 19% growth rate year-on-year from the 12% posted in the first quarter of 2024,” it said.
Retail and MSME loans grew by 37% year on year as of June, while wholesale loans expanded by 14%.
“The growth in retail and MSME loans was driven by home loans which grew 21%, credit cards which rose 60%, auto loans which grew 50%, and MSME loans which increased 68%… Retail and MSME loans as percent of total loans increased to 32%, up from 31% a quarter ago and 28% a year ago,” the bank added.
Its gross nonperforming loan (NPL) ratio was at 3.31% as of June, and NPL reserve cover was 81%.
On the funding side, total deposits grew by 11.48% to P676.16 billion as of June from P606.53 billion at end-2023.
Of this, 54% were current account, savings account deposits, which grew by 9% year on year.
The bank’s loan-to-deposit ratio stood at 85.37% at end-June, down from 88.76% at end-2023.
Total assets increased by 19% year on year to P948 billion as of June. Shareholders’ capital likewise grew 6% to P138 billion.
Its common equity Tier 1 ratio stood at 13.9% at end-June, while total capital adequacy ratio was at 14.8%. The bank’s liquidity coverage ratio was at 180% and net stable funding ratio was at 133%.
Security Bank has a total of 328 branches and 662 automated teller machines, cash recycler machines and cash acceptance machines to date nationwide.
The listed bank’s shares rose by 20 centavos or 0.32% to end at P62.80 apiece on Wednesday. — A.M.C. Sy