Security Bank Corp., the country’s fifth-largest lender in terms of assets, said net income in the first quarter declined 6.7 percent to P2.8 billion from P3 billion a year ago, on lower non-interest income and trading gains.
Security Bank said in a disclosure to the stock exchange net interest income increased 27 percent in January to March to P4.4 billion from P3.5 billion a year earlier, offsetting the decrease in non-interest income.
Non-interest income including securities trading gains declined to P1.8 billion from P2.4 billion a year ago.
“We’re pleased with the loan and deposit growth which has sustained net interest income growth. The bank has been able to manage the cost-to-income ratio in the midst of heavy investments in branch network, information technology and people. These are investments for the future which will allow us to scale up the business,” Security Bank president and chief executive Alfonso Salcedo Jr. said in a statement.
The bank’s loan book grew 28 percent year-on-year to P305 billion. Wholesale loans increased 26 percent while consumer loans grew 51 percent. Net interest margin was maintained at 3.1 percent.
Asset quality remained healthy, with net non-performing loan ratio at 0.14 percent, lower than 0.29 percent a year ago. NPL reserve cover remained high at 197 percent versus 171 percent a year ago.
Deposits increased 34 percent to P379 billion, and low-cost deposits grew 19 percent.
Total assets hit P729 billion. The cost-to-income ratio remained at an efficient 47 percent. Operating expense growth rate, excluding provisions for probable credit losses and impairments, was at 18 percent.
Security Bank successfully upgraded its core banking system as a part of its technology transformation program. The new system, used by leading financial institutions globally, will enable Security Bank to roll out new products and services faster.
Shareholders’ capital stood at P99.7 billion, up 78 percent year-on-year, and return on shareholders’ equity was at 11.4 percent in the first quarter. Common equity tier 1 ratio was 17.5 percent and total capital adequacy ratio was 19.9 percent.
Security Bank’s board of directors approved on April 25, 2017 cash dividends of P1.50 per share representing regular semestral cash dividend of P1 per share and a special cash dividend of P0.50 per share, with record date on May 11 and payable on May 25 this year.