Security Bank net profit down 7.2% due to lower interest income; supplies drop sharply

Security Bank Corp. said net profit fell 7.2% in 2021 to P6.9 billion as net interest income fell and expenses rose, while loan loss provisions fell. are greatly reduced.

In a statement to the stock exchange on Friday, the bank said fourth-quarter net profit rose 171% to 2.1 billion pesos as the economy opened up.

“Our fourth quarter results benefited from the easing of mobility restrictions and the resulting improvement in the economy. We are optimistic about economic activity in 2022, despite the impact of Omicron in January,” Security Bank Chairman and CEO Sanjiv Vohra said.

Net interest income fell 10% to 27.5 billion pesos in 2021, net interest margin – the difference between what it earns in interest on loans and what it pays out to depositors – fell 27 basis points to 4.43%.

Non-interest income fell 53% to 9.4 billion pesos, with the bank adding that 2020 results benefited from “extraordinary gains in corporate actions”. In 2021, service charges, fees and commissions increased by 25.4% to reach 4.5 billion pesos, while trading earnings increased by 34% to reach 3.7 billion pesos.

Operating expenses increased by 8% compared to the previous year, as the bank modernized its technology and staff. This brought the cost/income ratio to 57.8%.

The bank made provisions of 1.2 billion pesos for potential loan losses in the fourth quarter. This brought loan loss provisions to 5.3 billion pesos in 2021, well below the 26.4 billion pesos set aside in 2020.

Security Bank’s gross loan portfolio increased by 1% year-on-year to reach P467 billion at the end of 2021.

Retail loans, which accounted for a quarter of the loan portfolio, decreased by 9% in 2021. Retail loans increased by 5%.

At the end of 2021, the gross non-performing loan (NPL) ratio stood at 3.94%, while the NPL reserve coverage was 93%.

Total deposits increased by 19% year-on-year to P524 billion. Cheap savings and demand deposits, which accounted for 61% of the total, increased by 19%. High cost deposits increased by 18%.

Total assets increased 7% year-on-year to 700 billion pesos, while registered capital increased 1% to 125 billion pesos.

The bank’s capital adequacy ratio was 19.8%, while the common Equity Tier 1 ratio was 19.1%. Both are above minimum regulatory requirements.

In 2021, the return on equity was 5.57%.

Shares of Security Bank closed at P113 on Friday, down 80 centavos or 0.7%. – Luz Wendy T. Noble

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