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Security Bank Corporation (PSE:SECB) recently published its latest financial statements disclosing an ROE of 20.30% for the unaudited 2008 full-year results.
Security Bank turned in a rather impressive return on equity notwithstanding an estimated 12.3% year-on-year decline in total revenues of PhP 6.96B versus PhP 7.93B from the same period last year, as the local financial markets endured rising peso interest rates and mounting sovereign risk spreads as a result of recessionary fears in the world economy. Net interest income registered a positive 9.26% growth to PhP5.02B significantly boosted by an impressive 30% growth or PhP15.4B growth for net loans, above the industry average of 23%. The dampened revenues were largely the result of losses on securities trading whose impact was partially cushioned by the other components of non-interest income.
Security Bank Corporation President and Chief Executive Officer, Mr. Alberto S. Villarosa remarked on the 2008 results: “This year has proven to be one of unprecedented challenges for business in decades. However, we are proud of our efforts in building core revenues so as to mitigate the negative impact brought about by the economic and financial turmoil that began in the US and in Europe.”
Operating expenses net of impairment decelerated slightly, down 3.51% or PhP130.2M to PhP 3.58B. With expense growth moderated, unaudited net income for the 2008 reflected a 10.0% or PhP271.43M dip from the end of 2007 with a result of PhP2.44B.
Mr. Carlos M. Borromeo, Security Bank Corporation Chief Financial Officer, discussed the bank’s balance sheet against the backdrop of its revenue performance: “Our balance sheet remains healthy with an increase of 7% or by PhP 9.2 B to PhP137.9B, vis-ŕ-vis PhP 128.6B at the close of 2008 . This increase was largely driven by a robust 30% loan growth despite dampening economic sentiment.”
One of the highlights for 2008 for SBC is its successful offer of peso-denominated lower Tier 2 notes worth PhP 3 Billion last December 10, 2008 offering clients an outstanding 8. 625% yield, a 49.0 bps premium over the prevailing market rate during the initial launch of the issue. The LT2 notes were given an A-Plus national rating by Fitch Ratings further underscoring consumer and industry confidence on the Bank’s performance. Funding raised from these notes was used to refinance an earlier issue that will be maturing in January 2009.
Security Bank’s year-to-date income performance and balance sheet complexion have been accomplished without compromising asset quality as its non-performing loans ratio is pegged at 1.31% , a continued improvement from the 2.54% registered at the end of 2007. NPL cover was at 295% versus the December 2007’s 181%.
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