Security Bank Corporation Reported a PHP 9.1 Billion Net Income in 2023

Security Bank Corporation reported a net income of PHP 9.1 billion in 2023. Total revenues increased 8% year over year to PHP 43.0 billion. Net interest income climbed 19%, reaching PHP 34.7 billion. The net interest margin for the full year was 4.49%, up from 4.23% in 2022. Total non-interest income amounted to PHP 8.2 billion. Service charges, fees, and commissions increased 15% to PHP6.1 billion, driven by increases in credit card, remittance (including Instapay costs), and bancassurance fees.

Operating expenses increased by 14% due to increases in labor and technology. The cost-to-income ratio was 60.8%, up from 57.8% in 2022.

Pre-provision operating profit was PHP 16.9 billion, up 1% year on year. The Bank set aside PHP4.8 billion as provisions for credit and impairment losses in 2023, a 69% increase over the previous year's level of PHP2.8 billion, reflecting the impact of provisions releases in 2022 and higher credit card expenses in 2023. The gross non-performing loan ratio was 3.36%, while NPL reserve cover was 82%.

The return on shareholders' equity was 6.95 percent. The return on assets was 1.06%.

Quarterly Results: From October 1 to December 31, 2023, net income was PHP 1.5 billion. Revenues for the fourth quarter grew to PHP11.8 billion, up 15% year on year and 11% quarter on quarter. Net interest income climbed 38% year on year and 11% quarterly to PHP 10.0 billion in Q4-2023, driving revenue growth. The net interest margin in Q4-2023 rose to 5.20%, up 128 basis points year on year and 34 basis points quarter on quarter. In Q4-2023, service charges, fees, and commissions climbed 29% year on year and 17% quarter on quarter to PHP1.8 billion. The pre-provision operating profit for the quarter was PHP4.6 billion, an increase of 18% year-on-year and 13% quarterly. In Q4-2023, the bank set aside PHP2.2 billion in provisions for credit and impairment losses.
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CASA deposits climbed by 4% year-on-year and 7% quarter-on-quarter. CASA's percentage of total deposits was 60%, up from 58% a year ago. Total deposits were PHP 607 billion, up 8% quarter-on-quarter.

Six additional Security Bank branches were opened in the fourth quarter of 2023, increasing the bank's branch network to 325 as of December 31, 2023. New branches have opened in Hermosa (Bataan), Alaminos City (Pangasinan), CDO-Uptown (Cagayan de Oro City), Kidapawan City (North Cotabato), Cebu-Streetscape (Cebu City), and Iligan-Andres Bonifacio (Iligan City).
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Net loans rose to PHP538 billion, up 7% year on year and 7% quarter on quarter. Retail and MSME loans combined grew by 29% year on year, up from 16% in 2022. Wholesale loans remained stable compared to the previous year. Home loans increased by 18% year on year, credit cards by 44%, vehicle loans by 36%, and MSME loans by 77%. Retail and MSME loans surged 11% sequentially, while wholesale loans grew 7%. Retail and MSME loans as a percentage of total loans grew to 29%, up from 24% last year. Total investment securities increased 20% year on year to PHP 227 billion.
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As of December 31, 2023, the bank's liquidity coverage ratio (LCR) was 158% and its net stable funding ratio (NSFR) was 131%.

Security Bank remains one of the country's most well-capitalized private domestic universal banks. The common equity Tier 1 ratio was 15.3%, while the total capital adequacy ratio (CAR) was 16.2%. Total assets rose to PHP872 billion, up 3% year on year and 7% quarter on quarter. Shareholders' capital rose to PHP136 billion, up 8% year over year and 3% quarter-on-quarter.

“The economy is adjusting to moderating levels of inflation and continued elevated interest rates. Our growth for 2023 in both loans and deposits was evident across our retail and SME segments. In turn, our wholesale teams successfully secured key mandates to support client growth initiatives. We will accelerate that growth in 2024 and continue to deliver on our Transformation goals,” Security Bank President and CEO, Sanjiv Vohra said.

​Security Bank is a private domestic universal bank in the Philippines with total assets of PHP872 billion as of December 31, 2023. The Bank has been operating for 72 years since it was established in 1951. To-date, Security Bank has a total of 326 branches and 662 ATMs, Cash Recycler Machines (CRMs) and Cash Acceptance Machines (CAMs).