Security Bank Corp., the sixth-largest lender in terms of assets, said net income in the first quarter rose 1.5 percent year-on-year to P2.38 billion, fueled mainly by sustained strength in loans and deposits.
The bank said in a disclosure to the stock exchange Monday the January-to-March net profit was also 15 percent higher compared with the level posted a quarter ago.
“Total revenues grew 20 percent year-on-year to P7.6 billion. A core revenue component, net interest income from customer loans and deposits sustained its healthy trajectory growing by 29 percent to P4.7 billion,” the bank said.
“This was driven by the continued expansion of retail loans and low-cost deposits. Retail loans grew 49 percent while low-cost deposits increased 11 percent. Retail loans now account for 23 percent of total loans versus 17 percent a year ago,” it said.
Total loans rose 12 percent year-on-year to P412 billion. Total deposits increased 10 percent to P461 billion. Net interest spread on loans and deposits increased to 4.98 percent in first quarter 2019, up 26 basis points quarter-on-quarter and 78 basis points year-on-year.
Total net interest income increased 15 percent to P5.8 billion. Interest income from financial investments climbed 11 percent.
Overall, net interest margin increased to 3.43 percent in the first quarter, up 5 basis points quarter-on-quarter and 19 basis points year-on-year.
Service charges, fees, and commissions rose 26 percent to P857 million. Major contributors were credit cards, loan fees, bancassurance, deposit charges, and stock brokerage.
Securities trading gains amounted to P671 million, up from P416 million in first quarter 2018. Total non-interest income increased 39 percent to P1.8 billion.
Cost-to-income ratio of 53.7 percent was marginally better than 2018’s 53.9 percent despite a year-on-year operating expense growth (excluding provisions for credit and impairment losses) of 22 percent.
Expense growth was driven mainly by gross receipts and documentary stamp taxes followed by manpower costs. Headcount increased by 450 primarily to support the growth of the retail banking business and transformation of the bank’s infrastructure, processes and culture. Manpower now stands at 5,950.
