Security Bank Corp., the seventh-largest lender in terms of assets, said net profit in the first quarter jumped 21 percent year-on-year to P2.9 billion, driven by sustained growth in core business income and securities trading gains.
The bank said in a statement to the stock exchange Tuesday that total revenues, excluding trading gains, rose 41 percent to P9.7 billion from the same period last year.
Total net interest income increased 41 percent to P8.1 billion. Net interest margin in the first quarter improved to 4.68 percent, up 129 basis points year-on-year. Total non-interest income jumped 184 percent to P5.1 billion.
Securities trading gains were P3.5 billion, 420 percent higher than P671 million a year ago.
Operating expense grew 28 percent, driven primarily by manpower and costs related to business expansion. The cost-to-income ratio climbed to 39.4 percent from 53.7 percent a year ago.
Pre-provision operating profit in the first quarter was P8 billion, 129 percent higher than a year ago. The bank set aside P5.7 billion as provisions for credit losses in the first quarter. This is more than the full-year 2019 provision for credit losses of P4.2 billion.
“Factors impacting the increase in provisions in Q1-2020 included: credit model refinements reflecting the bank’s views on the current environment, headwinds in consumer and commercial lending, and the change in the loan mix towards more consumer loans. In view of the possible client impact of the pandemic, the bank has initiated portfolio reviews, reassessed its provisioning, and intensified client engagement during this period,” it said.
Return on shareholders’ equity increased 112 basis points to 9.8 percent from 8.6 percent a year ago. Return on assets rose 23 basis points to 1.47 percent from 1.24 percent a year ago.
It said the gross non-performing loan ratio of 1.59 percent remained better than industry peers’ 1.79 percent as of February 2020 based on Bangko Sentral ng Pilipinas data. Non-performing loan reserve cover was at 128 percent versus 129 percent a quarter ago and 186 percent a year ago.
Total loans grew 14 percent to P468 billion. Retail loans climbed 44 percent year-on-year and accounted for 29 percent of total loans. Wholesale loans rose 6 percent.
Total deposits increased 9 percent year-on-year to P503 billion. Low-cost deposits were up 30 percent. Low-cost deposits are 48 percent of total deposits, up from 40 percent a year ago.
