Makati—(PHStocks)—Security Bank Corp. (PSE: SECB) posted a record-high net income of PhP7.7 billion in 2015, which is 7% higher than previous year and translates to a 15.2% return on shareholders’ equity (ROE).
Loans increased 24% year-on-year to PhP240 billion while deposits grew 17% to PhP290 billion. Corporate/commercial loans increased 21%. Key consumer loan portfolios composed of home and auto loans and credit card receivables rose 67%. Total assets jumped 34% year-on-year to PhP532 billion.
Asset quality remained healthy, with net non-performing loan (NPL) ratio at 0.14%, lower than the 0.28% in 2014. Net NPL ratio of 0.14% continues to be among the lowest in the Philippine banking industry. NPL reserve cover stood at 205%, among the highest in the industry.
Net interest income increased by 11% to PhP12.4 billion. Net interest margin (NIM) was 3.3%. Total non-interest income was PhP6.5 billion, 16% higher than previous year. This growth was driven by a 38% increase in fee-based income with solid contribution from retail banking services such as bancassurance, credit cards and deposit transactions, as well as from asset management.
The bank earned PhP2 billion in gain on sale of securities, which is lower than the PhP3.1 billion posted in 2014. Core revenues, which comprise net interest income, fee-based income and trading gains attributable to customer flows, grew by 15% to PhP15.6 billion.
The cost-to-income ratio was 50%. Operating expense growth (excluding provisions for probable credit losses and impairments) was 20% due to continuing investments in building the retail banking business and delivering Security Bank’s BetterBanking promise to customers. Two new innovative products were launched in line with the Bank’s BetterBanking promise, the Security Bank Mastercard Complete Cashback credit card and the All-Access Account.
“2015 results exceeded our expectations. Customer loans grew at rates significantly above industry with no deterioration in the net NPL ratio. Likewise, deposits outpaced industry growth. Core revenues are growing robustly, with the increase progressively making up for lower trading gains. Our three core businesses – Wholesale Banking, Retail Banking, and Financial Markets/Treasury, all contributed to produce record net profits this year. We are also delighted to have been named Bank of the Year – Philippines by The Banker, which is considered the Oscars of the global banking industry. This award, along with the strong results, gives kudos to the dedication and hard work of the entire Security Bank team. Most important, we thank our customers for their continuing trust and support,” said Security Bank president and CEO Alfonso L. Salcedo Jr.
“Shareholders’ capital increased 14% to PhP53.2 billion from retained earnings. Our Basel III capital adequacy ratios are healthy, with Common Equity Tier 1 (CET 1) at 12.2% and Total CAR at 15.2%, which are well above the regulator’s required minimum of 8.5% and 10%, respectively,” said Security Bank Chief Financial Officer Mr. Joselito E. Mape.