Security Bank Corporation (PSE: SECB) earned PhP 4.0 billion up 21% versus year ago levels maintaining its high return on equity (ROE) of 20%.
The earnings improvement was underpinned by continued strength of core revenues with Net Interest Margin increasing 21% to PhP 5.5 billion on the back of customer loans growing 23% to PhP 84.5 billion.
The healthy net margins were supplemented by Service Charges and FX Income growing by 17%. These more than compensated for lower trading gains, resulting to total revenues of PhP 7.7 billion, 6.2% higher than the figures from the same period last year.
The bank’s operating expenses, excluding provisions and impairment losses, were steady at PhP 3.3 billion from the year-ago level, translating to a cost to income ratio of 42.5%.
The balance sheet as of the third quarter of 2011 expanded to PhP 196.8 billion or 36.2% from the same period in 2010 due mainly to customer loans and trading and investment securities. Asset quality numbers continue to remain industry best with Non-performing loans (NPL) ratio and cover of 0.9% and 338%, respectively. Furthermore, the bank’s Capital Adequacy Ratio (CAR) at 18.3% shows a fundamentally sound capital base allowing for further expansion and growth.
Recently, the credit rating agency Capital Intelligence upgraded Security Bank’s Long-term Foreign Currency rating to “BB” from “BB-’”. The rating agency meanwhile affirmed SECB’s Short-term Foreign Currency rating of “B”. These achievements strengthen the bank’s profile amongst local and international peers as it continues to receive various awards such as “Best Banking Group in the Philippines” at World Finance Banking Awards known as the pinnacle of achievement for major banks given by the London-based publication World Finance. Leading financial magazine, Asiamoney also named SECB as “The Best Debt House in the Philippines” citing the Bank’s ability to deliver “ROEs well above those of the big banks and generally outperforming them in efficiency ratios.” SECB was likewise named The Best Managed Company in the Philippines – Small Cap Corporate of the Year” -- a distinguished feat being the only bank among the awardees from the Philippines.