Security Bank Corporation disclosed a net income of P3.3 billion for the first nine months of 2010, 51% or P1.1 billion higher than the same period last year. The net income performance for the period translates to a 23% return on equity and is consistent with the bank’s sustained 32% compound annual growth rate in net income over the past five years.
A crucial component of its performance over the past nine months is a remarkable 79% growth in its non-interest income to P2.7 billion, a P1.2 billion year-on-year increase. The aggregate Trading and FOREX gains of P1.8 billion contributed to the acceleration with a 229% improvement from the same period in 2009. Moreover, Security Bank’s net interest income for the period stood at P4.6 billion propelled by its ability to maintain its net interest margin of 4.5%. The combined revenue performance drove total operating income to P7.2 billion, up by 22% or P1.3 billion for the third quarter ended 2010.
Security Bank Corporation President and chief executive officer, Alberto S. Villarosa, explained: “We are very pleased with that we have outperformed our targets. We are confident that we will significantly exceed our net income targets as well as most analyst expectations for the year.”
On the other hand, operating expenses (excluding credit and impairment losses) for year-to-date third quarter of 2010 has remained tepid totaling PhP 3.3 billion. While the bank continued to invest in its people and infrastructure, registering a a slight 8.6% increase in operating expenses versus the comparative period in 2009, its revenue outperformance has resulted in a cost-to-income ratio of 45.5%, a substantial improvement in efficiency from last year’s 51.1%.
The bank’s asset quality numbers remain fundamentally sound as the non-performing loans (NPL) ratio remains at an industry-low of 1.6% with a corresponding NPL cover of 252%. The Bank’s capital base remains exceptionally solid with a total Capital Adequacy Ratio (CAR) of 18.4% and Tier 1 CAR of 15.8% for the third quarter of 2010.
Aside from the significant shareholder return achieved, the Bank further leveraged on its asset base, accomplishing an average return on assets of 3.1%, up from last year’s 2.08%. The results translate to earnings per share for the nine-month period of Php 7.91 per share versus Php 5.97 per share for the prior year.
In the third quarter, the bank’s board of directors approved a regular dividend of P0.25 per share and P0.75 special dividend in August 2010 with October 22, 2010 as record date and November 19, 2010 as payment date. Total dividend payout for this year is at P2.00 per share at par with the bank’s consistent dividend policy.
