Security Bank Corporation (PSE:SECB) recently disclosed its First Half Financial Results with a high 20.76% Return on Equity (ROE) versus the 19.23% ROE for the full year 2008, 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 20.9 % growth of its loan portfolio to Php 66.4 billion and the 27.6 % increase in its deposit base to Php 105 billion over the first half of 2008. Consequently, the growth in its balance sheet was accompanied by a 24% year-on-year increase in net interest income to Php 2.9 billion versus the prior year’s PhP 2.4 billion.
Total operating income for the first semester of 2009 grew by Php 434.8 million or 12.4% to Php 3.9 billion over the prior year driven primarily by net interest income, albeit tempered by an 11.5% decrease in other income which stood at PhP 1.0 billion. With the reduction in interest rate volatility, trading and securities gains reflected a 12% year-on-year growth which was offset by a 21% reduction in foreign exchange gains and service charges.
Operating expenses for the period amounted to P2.0 billion. The combined results of its revenue and expense performance resulted in a net income for the first half of PhP 1.4 billion, producing a respectable 8% growth from the same period last year.
Security Bank President and Chief Executive Officer, Mr. Alberto S. Villarosa remarked on the H1 2009 results: “Our focus on building our core business while prudently managing risks in our earnings stream have been successful. Our sound balance sheet gives us the leverage to explore different opportunities. While signs of a global economic recovery still appear tentative, we maintain our guarded optimism for the country and the Bank. “
Mr. Carlos M. Borromeo, Security Bank Corporation Chief Financial Officer discussed the bank’s balance sheet against the backdrop of its revenue performance: “Balance sheet health remains to be a top priority and can be seen in first half 2009 performance, showing off an increase in resources of 10% to PhP 140 billion from June 2008’s PhP 127.7 billion. The 21% increase in the loan portfolio shows the Bank’s steady shift in its balance sheet profile as loans now account for 47.4% of total assets versus 43.0% recorded a year ago. This result was 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. The Bank had likewise set aside provisions of 306% cover for these non-performing loans.
The Bank’s fundamentally sound capital base is reflected in its Capital Adequacy Ratio of 14.5%, even after having called Php 3.0 billion of its outstanding Lower Tier 2 Capital in the first quarter of 2009.
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