Security Bank Corp., one of the country’s biggest lenders in terms of assets, received a higher Environmental, Social and Governance score from Morgan Stanley Capital International.
Morgan Stanley upgraded the ESG rating of Security Bank from “B” to “BB”, taking into account its success in improving overall corporate governance and improvements in customer satisfaction.
Morgan Stanley said in a statement the bank’s mechanisms for addressing customer issues and complaints ranks as one of the best among industry peers.
Similarly, the bank was ranked to have a “lower risk of security and data breaches when compared with peers.”
MSCI ESG Ratings measure a company’s resilience to long-term ESG risks. Organizations are scored on an industry-relative AAA-CCC scale across the most relevant key issues based on a company’s business model. The ratings look at publicly available data to form its assessment.
Security Bank Sustainability head Nikki Lizares said the higher rating from Morgan Stanley showed that the bank is on the right track in its efforts to achieve customer-centricity.
“We will continue to get even better as we live out our mission to enrich lives, empower businesses, and build communities sustainably through financial service excellence,” Lizares said.
ATR Asset Management included Security Bank stock in its Sustainability Development Goal Fund portfolio. This inclusion comes after ATRAM’s data gathering session where it reached out to over eighty-eight publicly listed companies with a robust sustainability framework and an effective roster of initiatives.
The ATRAM SDG Fund aims to achieve capital growth by investing in companies that contribute to positive environmental and social change.
Lizares said Security Bank adopted its Environmental, Social and Risk Management System in 2021 to better manage environmental and social risks.
The bank in 2022 committed to discontinue financing the construction of new coal-fueled power generation plants, with a view to exit funding coal power generation by 2033.
Its board of directors approved this year the bank’s Sustainable Finance Framework which establishes principles to guide its lending, investment and procurement practices.
Security Bank maintained its strength and profitability despite the challenging business environment marked by higher interest rates, elevated inflation and uncertain global developments.
The bank posted a 53-percent year-on-year increase in net income to P10.6 billion in 2022, driven by growth in core businesses, lower credit provisions and normalized income tax provisions.
Total revenues grew 8 percent to P39.6 billion. Net interest income increased 7 percent to P29.2 billion.
Operating expense was 8 percent higher, driven by investments in manpower and technology. Cost-to-income ratio was 57.8 percent, same level as in 2021.
The bank set aside P2.8 billion as provisions for credit and impairment losses in 2022, a 46-percent decrease from P5.3 billion in 2021.
