Security Bank Corp., the fifth-largest lender in terms of assets, said net income in the first half grew 8 percent to P5.2 billion from a year ago, driven by a double-digit increase in net interest income.
“This result was driven by a 26-percent or P1.9-billion increase in net interest income to P9.3 billion. Non-interest income including trading gains was P2.9 billion, a 15-percent or P0.5-billion decrease,” the bank said in a statement Tuesday.
Security Bank said in the second quarter alone, net income grew 32 percent to P2.43 billion, as net interest income rose 24 percent to P4.9 billion.
“In the first half of 2017, the increase in net interest income was driven by a 27-percent growth in the loan portfolio to P340 billion and a 26-percent growth in deposits to P380 billion,” it said.
Low-cost deposits increased 21 percent and wholesale loans grew 25 percent, of which corporate loan growth was 23 percent and middle-market loan growth was 27 percent.
Consumer loans increased 49 percent and net interest margin stood at 3.2 percent in the second quarter, up from 3.1 percent in the first quarter 2017. Service charges, fees and commissions grew 4 percent to P1.1 billion.
Operating expenses, excluding provisions for probable credit losses and impairments, went up 16 percent. This was driven by manpower cost growth of 23 percent as new branches, retail lending and e-commerce platforms were staffed. The bank opened 25 new branchesin the last 12 months to June 2017.
Information technology, both hardware and software, and branch network expansion costs were reflected in the 44-percent increase in depreciation and amortization and software costs. Security Bank is in the midst of upgrading its core banking systems to enable it to roll out new products and services. The cost-to-income ratio was 49 percent.
Asset quality remained healthy with net non-performing loan ratio of 0.10 percent versus 0.14 percent a quarter ago. NPL reserve cover was 220 percent versus 197 percent in the previous quarter.
Security Bank’s total assets increased 26 percent year-on-year to P775 billion. Shareholders’ capital was P101 billion, up 7 percent.
Return on shareholders’ equity was 10.6 percent and common equity tier 1 ratio was 16.6 percent. Total capital adequacy ratio was 19 percent.