Security Bank Corporation Reported P2.6 Billion in Net Income in Q12024, Up 11% YOY

Security Bank Corporation posted net profit of P2.6 billion in Q12024, reflecting growth in its Retail and MSME businesses.

Year on year, net profit increased by 11%. Total revenues rose 27% to P12.5 billion. Net interest income increased 44% year over year to P10.7 billion. Total non-interest income amounted to P1.8 billion. Service charges, fees, and commissions grew 136% year on year to P3.1 billion, driven by the Bancassurance milestone fee. Normalized net income would remain virtually unchanged if extraordinary items on both revenue and expense were excluded, as they offset one another.

Net profit increased by 71% quarter over quarter. Total revenue climbed by 6%. The net interest margin rose to 5.32%, up 12 basis points from a quarter ago and 126 basis points from a year ago. Net interest income increased by 7% during the quarter. Service charges, fees, and commissions surged 76% quarter over quarter.
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Given ongoing investments in labor and technology to speed transformation, operating expenses were 24% higher than a year ago. Strong sales performance resulted in a cost-to-income ratio of 60.7%, down from 62.6% a year earlier.

Pre-provision operating profit was P4.9 billion, a 34% increase year over year. In Q12024, the bank set aside P1.5 billion as provisions for credit losses, which is 30% less than the previous quarter's provisions of P2.2 billion in Q42023. The gross non-performing loan ratio was 3.4%, while NPL reserve cover was 81%.
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The return on shareholders' equity rose to 7.71%, up from 7.42% a year before. The return on assets also improved to 1.20%, up from 1.15% a year earlier.

Total deposits rose to P638 billion, up 22% year over year. CASA deposits rose 6% year over year. CASA's percentage of total deposits was 56%.

Security Bank opened three new branches in the first four months of 2024, bringing the total number of branches to 328. The new branches are located in Davao North Diversion (Davao City), Sta. Mesa (Manila) and Isabela (Ilagan City).
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Net loans rose to P545 billion, up 12% year over year and 1.3% quarter over quarter. Retail and MSME loans grew at a 32% annual rate, up from 29% in the fourth quarter of 2023. Wholesale loans increased 4% year over year. Home loans increased 18% year on year, followed by vehicle loans (46%), credit cards (49%), and MSME loans (74%). Retail and MSME loans climbed 6% sequentially from the previous quarter. Retail and MSME loans as a percentage of total loans grew to 31%, up from 26% last year and 29% the previous quarter. Total investment securities rose to P243 billion, up 23% year over year and 7% quarter over quarter.
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As of March 31, 2024, the bank's Liquidity Coverage Ratio (LCR) was 184%, and its Net Stable Funding Ratio (NSFR) stood at 131%.

Security Bank remains one of the country's best-capitalized private domestic universal banks. The common equity Tier 1 ratio was 14.4%, while the total capital adequacy ratio (CAR) was 15.3%. Total assets rose to P887 billion, up 12% year on year. Shareholders' capital rose to P136.6 billion, up 6% year on year.

On March 26, 2024, Security Bank approved a cash dividend declaration of P1.50 per common share, representing the usual semestral cash dividend, with a payment date of April 29, 2024.
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On May 9, 2024, Security Bank issued US$400 million in senior unsecured fixed rate notes with a yield of 5.50%, a five-year tenor, and a maturity date of May 14, 2029. The settlement date was May 14, 2024. The bonds were part of the bank's US$1 billion Medium Term Note Program. The substantial demand and successful pricing of the dollar bond issuance demonstrate the market's sustained confidence in Security Bank's credit strength and expansion aspirations.

“Our results for the first quarter reflect both accelerating momentum across our Retail, MSME, and Wholesale Segments. We're excited to introduce our brand-new Security Bank app in Q2, which will enhance the online banking experience and reinforce our BetterBanking commitment,” said Security Bank President & CEO, Sanjiv Vohra.

Security Bank is a private domestic universal bank in the Philippines with total assets of PHP887 billion as of March 31, 2024. The Bank has been operating for 72 years since it was established in 1951. To-date, Security Bank has a total of 328 branches and 663 ATMs, Cash Recycler Machines (CRMs) and Cash Acceptance Machines (CAMs).

In 2024, Security Bank was recognized Best for High-Net-Worth in the Philippines by Euromoney. This is the fourth consecutive year Security Bank wins the Euromoney/Asiamoney award (i.e., 2024, 2023, 2022 & 2021).

​In 2023, Security Bank was awarded Best Corporate Bank in the Philippines award by Asiamoney; Best Retail Bank in the Philippines by Alpha Southeast Asia for four consecutive years; Best Payment Solution in the Philippines – BIPPS (Billing Invoice Presentment and Payment System) by Alpha Southeast Asia; the 4 Golden Arrow Recognition for corporate governance excellence by the Institute of Corporate Directors (ICD); Best Investor Relations Company (Philippines), Asia’s Best CSR, Asia’s Best CEO (Investor Relations), Asia’s Best CFO (Investor Relations) and Best Investor Relations Professional (Philippines) by Corporate Governance Asia for three consecutive years; Best Small Cap Company, Philippines 2023 – Silver by FinanceAsia; Workplace Wellness Programme Award – Philippines by ESGBusiness Awards (Singapore); and Renewable Energy Financing Programme-Philippines Award – SB Capital by Alpha Southeast Asia. Security Bank was awarded Excellence in Employee Engagement by Retail Banker International in the RBI Asia Trailblazer Awards 2023. Security Bank ranked in Forbes’ World’s Best Employers in 2023, whereby Security Bank ranked #54 in the world, #2 among Philippine companies, and #1 among Philippine banks. Forbes partnered with market research firm Statista to create Forbes’ seventh annual list of the World’s Best Employers.