Security Bank Corp., the seventh-largest lender in terms of assets, said net income in the first half rose 14 percent year on-year to P5.7 billion due mainly to sustained growth in net interest income and trading gains coupled with proactive provisioning.
Total revenues increased 68 percent to P25.9 billion. Excluding trading gains, total revenues grew 30 percent to P18.7 billion from the same period last year.
“We are carrying forward the momentum from Q1-2020, taking advantage of market opportunities for trading gains, along with prudent growth in the underlying core businesses. As we expect the impact of the pandemic on our loan portfolio will continue to unfold over the coming quarters, we have adopted a proactive stance on our provisions,” bank president and chief executive Sanjiv Vohra said in a statement.
“In spite of that, our balance sheet remains strong and allows us to invest in our transformation initiatives which help us deliver BetterBanking to our clients during these challenging times,” he said.
Total net interest income increased 34 percent to P15.8 billion. Securities trading gains totaled P7.2 billion, significantly higher than P1 billion in first half 2019. Service charges, fees and commissions decreased 10 percent to P1.7 billion.
The cost-to-income ratio improved to 39.7 percent from 53.7 percent a year ago.
Pre-provision operating profit in the first half of 2020 was P15.6 billion, 120 percent higher on year.
The bank set aside P11 billion as provisions for credit losses in the first six months, up from just P639 million a year ago, which reflects the bank’s proactive provisioning.
Gross non-performing loan ratio was at 1.58 percent. NPL reserve cover increased to 174 percent from 128 percent a quarter ago and 125 percent a year ago.
The bank's net profit in the second quarter hit P2.8 billion, up 8 percent from year-ago level. Total revenues increased 61 percent to P12.6 billion. Excluding trading gains, total revenues rose 20 percent to P8.9 billion from the same period last year.