Security Bank Corporation (PSE:SECB) recently disclosed its First Quarter Financial Results with a high 23% Return on Equity (ROE) versus the 19% ROE for the full year 2008, thus maintaining its track record for superior returns for its shareholders.
These financial results were achieved on the back of an expansion in the Bank’s core businesses as reflected in the vibrant 38% growth of its loan portfolio to Php 67 billion and the 28% increase in its deposit base to Php 108 billion over the first quarter last year. More significantly, the growth was accompanied by a 24% year-on-year increase in net interest income to Php 1.4 billion for the quarter.
As the Bank recorded an extraordinarily high level of securities and foreign exchange gains in the same period last year, these same revenue components stood at Php 360 million for the first quarter of 2009, 60% lower year on year. Fees, commissions, service charges and miscellaneous income are at Php 258 million, 18% lower on account of one-off asset disposal gains recorded in the first quarter 2008.
Operating Expenses at Php 1.0B registered a modest 2.5% increase over the prior year notwithstanding its increased manpower count over the same period last year.
The combined results of its revenue and expense performance resulted in a net income for the first quarter of Php 750 million. While the net income performance achieved is 10% lower than the extraordinarily high level recorded in the first quarter of 2008, this level is better than the Bank’s targets for the period and on track towards achieving its expected full year performance goals.
Security Bank President and Chief Executive Officer, Mr. Alberto S. Villarosa remarked on the Q1 2009 results: “We are very pleased with our first quarter business and financial results, specifically the significant and steady growth in our core businesses even as we prudently risk manage the earnings stream from our volatile trading activities. Our core businesses continue to provide us with a solid foundation and fundamentally sound balance sheet and capital base with which to pursue the opportunities for the remainder of the year. While we recognize that the dislocation brought about the current global financial crisis has yet to fully stabilize, we continue to maintain an outlook of guarded optimism for the country and for Security Bank in particular.”
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 as it increased 9% over the first quarter of 2008 to P140 billion. The 38 % growth in the loan portfolio reflects a significant shift in the balance sheet profile with loans now accounting for 48% of total assets versus the 38% recorded a year earlier. This growth has been achieved while improving asset quality indices and capital strength.”
Security Bank’s non-performing loans ratio of 1.4% for the period remains among the best in the industry and represents a continued improvement over the 2.8% registered in the first quarter of 2008. NPL cover, meanwhile, remains unparalleled at 285% versus the 200% recorded a year earlier.
The Bank’s fundamentally sound capital base is reflected in Capital Adequacy Ratio of 14.3%, even after having called Php 3.0 billion of its outstanding Lower Tier 2 Capital in the first quarter of 2009. |
