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RETAIL BANKING, WHOLESALE BANKING | Cesar Tordesillas, Philippines
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Security Bank ROE up 20.76% for 1st half

Increase in loan portfolio and deposit base pushed Security Bank's Return on Equity to 20.76 percent. This is significantly higher than the Bank's 19.23 percent ROE for the full year 2008.

The expansion of the Bank's core businesses is reflected in the vibrant 20.9 percent growth of its loan portfolio to US$1.357 billion and the 27.6 percent increase in its deposit base to US$2.147 billion over the first half of 2008. Consequently, the growth in its balance sheet was accompanied by a 24 percent year-on-year increase in net interest income to US$59.29 million versus the prior year's US$49 million.

Total operating income for the first semester of 2009 grew by US$8.89 million or 12.4 percent to US$79.7 million over the prior year driven primarily by net interest income, albeit tempered by an 11.5 percent decrease in other income which stood at US$20.4 million. With the reduction in interest rate volatility, trading and securities gains reflected a 12 percent year-on-year growth which was offset by a 21 percent reduction in foreign exchange gains and service charges.

Operating expenses for the period amounted to US$40.89 million. The combined results of its revenue and expense performance resulted in a net income for the first half of US$28.6 million, producing a respectable 8 percent growth from the same period last year.

"Our focus on building our core business while prudently managing risks in our earnings stream have been successful. Our sound balance sheet gives us the leverage to explore different opportunities. While signs of a global economic recovery still appear tentative, we maintain our guarded optimism for the country and the Bank," remarked Security Bank president and Chief Executive Officer, Mr. Alberto S. Villarosa on the H1 2009 results.

Mr. Carlos M. Borromeo, Security Bank Corporation Chief Financial Officer discussed the Bank's balance sheet against the backdrop of its revenue performance: "Balance sheet health remains to be a top priority and can be seen in first half 2009 performance, showing off an increase in resources of 10 percent to PhP 140 billion (US$2.86 billion) from June 2008's PhP 127.7 billion (US$2.6 billion). The 21 percent increase in the loan portfolio shows the Bank's steady shift in its balance sheet profile as loans now account for 47.4 percent of total assets versus 43.0 percent recorded a year ago. This result was achieved while improving asset quality indices and capital strength."

Security Bank's non-performing loans ratio of 1.4 percent for the period remains among the best in the industry. The Bank had likewise set aside provisions of 306 percent cover for these non-performing loans.

The Bank's fundamentally sound capital base is reflected in its Capital Adequacy Ratio of 14.5 percent, even after having called US$61.3 million of its outstanding Lower Tier 2 Capital in the first quarter of 2009.

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