Security Bank Corp., the seventh-largest lender in terms of assets, said Monday net income jumped 18 percent in the first nine months to P7.7 billion from a year ago, on the back of the sustained strength of core businesses.
The bank said in a statement net interest income from customer loans and deposits/peso bond issuance surged 41 percent to P15.9 billion. Interest income from financial investments increased 7 percent to P7.8 billion.
Total net interest income grew 23 percent to P18.9 billion. Service charges, fees and commissions in the nine-month period also jumped 45 percent to P2.9 billion.
Securities trading gains reached P1.4 billion, while total revenues rose 29 percent to P24.2 billion.
Income before provision for credit losses and income tax in the nine-month period climbed 31 percent to P11.3 billion. Income before provision for credit losses and income tax in the third quarter 2019 was P4.2 billion, up by 38 percent year-on-year.
Cost-to-income ratio stood at 53.3 percent despite the 27-increase in operating expenses in the first nine months, excluding provisions for credit and impairment losses, mainly due to gross receipts and documentary stamp taxes and manpower costs to support growth of the retail banking business.
Excluding GRT and DST, operating expenses grew 17 percent and the cost-to-income ratio was 43.9 percent.
The bank said asset quality remained healthy, with gross non-performing loan ratio at 1.4 percent, lower than industry’s 1.7 percent as of August 2019.
Under the new BSP regulations implemented last year requiring expected credit loss provisioning by banks, Security Bank set aside P1.1 billion for provision for credit losses in the third quarter.
This brought provision for credit losses in the nine-month period to P1.75 billion. NPL reserve cover was 110 percent, and inclusive of reserves in retained earnings, NPL reserve cover was 146 percent.
Security Bank said in the third quarter, net income rose 22 percent year-on-year to P2.7 billion as total revenues grew 35 percent to P8.8 billion.
“The growth in revenues was driven by core business income. Net interest income from customer loans and deposits/peso bond issuance increased 49 percent year-on-year to P5.9 billion. Key to this growth
was the continued expansion of retail loans and low-cost deposits, and disciplined pricing in wholesale loans,” it said.
Retail loans increased 54 percent year-on-year. Retail loans now account for 27 percent of total loans versus 19 percent a year ago.