Security Bank : net income up 100% to PHP6.2 billion in H1-2022

15 August 2022, Makati City, Philippines - Security Bank Corporation (PSE: SECB) posted a 100% year-on-year increase in net income to PHP6.2 billion in H1-2022, driven by growth in core businesses, lower credit provisions and normalized income tax provisions.

Net interest income increased 6% to PHP14.4 billion. Total non-interest income was at PHP4.8 billion. Service charges, fees and commissions grew 22% to PHP2.6 billion, led by increase in fees from deposits, credit cards and capital markets. Other non-interest income excluding securities trading gains and fee income rose 47% to PHP2.2 billion, driven mainly by foreign exchange income and recovery on charged-off assets.

Operating expense was 4% higher, driven by investments in technology and manpower to improve customer experience. Cost-to-income ratio was 55.9% compared to 56.4% a year ago.

Pre-provision operating profit was PHP8.5 billion, up 6% year-on-year. The Bank set aside PHP408 million as provisions for credit losses in H1-2022, a decrease versus year-ago level of PHP2.4 billion. Gross non-performing loan ratio decreased to 3.28% from 3.65% in previous quarter. NPL reserve cover increased to 92% from 90% in previous quarter.

Return on assets increased to 1.70% from 0.92% in H1-2021. Return on shareholders' equity increased to 10.0% from 5.05% a year ago.

Quarterly Results: For the period April 1 to June 30, 2022, net income was PHP3.5 billion, 139% higher than year-ago level and 29% higher than quarter-ago level. On a sequential quarter-on-quarter basis, total revenues increased 7% to PHP10.0 billion. Net interest income grew 7% to PHP7.5 billion. Net interest margin in Q2-2022 was 4.36%, up 3 basis points quarter-on-quarter and up 7 basis points year-on-year. Total non-interest income increased 7% to PHP2.5 billion. Service charges, fees and commissions grew 2% to PHP1.3 billion. Other non-interest income excluding securities trading gains and fee income rose 17% to PHP1.2 billion.

Operating expense in Q2-2022 was 4% lower versus quarter-ago.

Pre-provision operating profit in Q2-2022 was PHP4.7 billion, 23% higher than quarter-ago level. In Q2-2022, the Bank set aside PHP328 million as provisions for credit losses.

Balance sheet remains strong

Low-cost savings and demand deposits grew 18% and increased to 59% of total deposits from 55% a year ago. This drove total deposits to grow 9% year-on-year to PHP569 billion.

Net loans increased 15% year-on-year to PHP490 billion, driven by wholesale loans which grew 18% and retail loans which grew 6%. Retail loans are 23% of total loans compared to 26% a year ago.

On a sequential quarter-on-quarter basis, net loans grew 5% with both wholesale and retail loans increasing by 6% and 4%, respectively. Low-cost savings and demand deposits increased by 4% and total deposits grew by 7%.

Security Bank continues to be among the country's best capitalized private domestic universal banks. Common Equity Tier 1 Ratio was 16.7% and Total Capital Adequacy Ratio (CAR) was 17.2%. Total assets increased to PHP766 billion, up 9% year-on-year. Shareholders' capital was at PHP124 billion.

"We are very pleased by the continued improvement in our core businesses. Our growth in loans and investment securities, is a tangible manifestation of our commitment to clients to support the reopening of the economy and address the impact of inflation." - Security Bank President & CEO, Sanjiv Vohra.

About Security Bank

Security Bank is a private domestic universal bank in the Philippines with total assets of PHP766 billion as of June 30, 2022. The Bank has been operating for 71 years since it was established in 1951. Security Bank has a total of 316 branches and 657 ATMs to date.

Security Bank was recently awarded in April 2022 with "Best for Mass Affluence/HNW in the Philippines 2022" award by Asiamoney. The Bank's major citations in 2021 are: Philippines' Best Bank by Euromoney; Best for HNWs (High Net Worth Clients) in the Philippines by Asiamoney; Best Retail Bank in the Philippines by Alpha Southeast Asia; and Best Culture of Learning and Diversity Champion by LinkedIn Talent Awards.

Major awards in 2020 are: The Strongest Bank in the Philippines in 2020 by The Asian Banker; Best Bank in the Philippines for 2020 by The Lafferty Group (The Statement Magazine); and Best Retail Bank in the Philippines in 2020 by Alpha Southeast Asia.

Major awards received in 2019 are: The Best Retail Bank in the Philippines by The Asian Banker and Deposit Product of the Year-"All Access Account" by The Asian Banker; Automobile Lending Product of the Year by The Asian Banker (Philippines Awards 2019) and Deposit Product of the Year by The Asian Banker (Philippine Awards 2019); Best Bank in the Philippines by Alpha Southeast Asia and Best SME Bank in the Philippines by Alpha Southeast Asia; and Best Bank for SMEs in the Philippines by Asiamoney.

More information is available on www.securitybank.com.