SECURITY BANK Corp. posted a lower net profit in the first three months of 2021 amid a decline in its trading gains as well as its earnings from loans and investments.
The lender’s net income dropped 43% to P1.643 billion in the January to March period from P2.888 billion a year earlier, the bank said in its financial report filed with the local bourse on Friday.
Return on shareholders’ equity was 5.38%, down from 9.7% as of March 2020, while return on assets also dropped to 0.96% from 1.46%.
Net interest income went down by 17.7% to P6.649 billion from P8.085 billion as interest earnings on both loans and investments dropped.
The bank’s net interest margin declined by 29 basis points year on year to 4.39%.
Meanwhile, non-interest income dropped 58% to P2.1 billion. This was dragged by the decline in its gains from securities trading, which shrank by 80% to P689 million from P3.5 billion.
On the other hand, income from service fees and commissions inched up 1% to P1.1 billion, backed by higher gains from bancasurrance, credit card, stockbrokerage and miscellaneous fees.
Total operating income stood at P8.784 billion, down by 33% from the P13.215 billion a year ago.
Security Bank’s gross loans inched down by 5% to P450 billion from a year earlier. By segment, retail loans went down by 12%, while wholesale loans dropped by 2%.
Its gross non-performing loan (NPL) ratio stood at 3.41%, lower than the 3.9% seen in the previous quarter, while its net NPL ratio was at 1.55% (from 1.97%). The bank’s NPL reserve cover improved to 118% from 115% as of end-2020.
On the other hand, the bank’s total operating expenses dropped 49.76% to P5.465 billion from P10.879 billion in the first three months of 2020.
Provisions for credit losses declined 93% to P402 million due to base effects.
Meanwhile, total deposits rose by 3% to P519 billion as of March. Low-cost savings and demand deposits increased by 12%, while high-cost deposits dropped by 5%.
The lender’s assets went down by 9% to P718 billion as of March, while shareholders’ capital inched up by 1% to P121 billion.
Security Bank’s capital adequacy ratio stood at 20.11% at end-March, up from 20.09% as of December 2020, while its common equity Tier 1 ratio was at 19.23% (from 19.19%), both above the minimum regulatory requirements.
“We are fortunate that our strong capital equips the bank to support clients directly through loans and indirectly through significant investments in both our team and our technology to improve customer experience,” Security Bank President and Chief Executive Officer Sanjiv Vohra was quoted as saying.
The bank said it had a total of 315 branches and 772 automated teller machines to date.
Security Bank shares closed at P115.30 apiece on Friday, up by 20 centavos or by 0.17%. — LWTN