Security Bank Corp. recorded a net income of P9.2 billion
for the first three quarters of 2026, representing a modest one-percent
increase from the P9.1 billion reported during the same period last year.
Improved revenue generation and tighter expense management helped sustain
earnings despite rising provisions for potential loan losses.
The bank's total revenues grew eight percent year on year to
P52.5 billion, while pre-provision operating profit increased 12 percent to
P22.9 billion. The latter measures earnings before accounting for provisions
against possible credit losses, offering an indication of the bank's underlying
operating performance.
Net interest income reached P50 billion, supported by a net
interest margin of 5.93 percent. Meanwhile, income from service charges, fees
and commissions amounted to P6.1 billion.
Security Bank also demonstrated better cost discipline.
Operating expenses rose by just four percent, considerably slower than revenue
growth. This helped reduce its cost-to-income ratio to 56.4 percent, compared
with 58.1 percent in the previous year's comparable period.
President and CEO Victor Lee said the latest financial
performance reflected continued progress in revenue expansion and operational
efficiency. He added that the bank would maintain disciplined management of
expenses, credit exposure and capital while prioritizing business areas with
long-term growth potential.
Third-quarter earnings and credit quality
For the July-to-September period, Security Bank generated
P3.1 billion in net income on revenues of P17.6 billion. Pre-provision
operating profit reached P7.4 billion.
Provisions for credit losses declined nine percent quarter
on quarter to P3.4 billion, providing some relief from the cost of managing
potential loan defaults.
The bank's gross non-performing loan ratio stood at 3.17
percent, indicating broadly stable asset quality. Its NPL reserve coverage
reached 84 percent, reflecting the provisions maintained against loans
classified as non-performing.
Deposits and balance sheet expansion
Security Bank's deposit base expanded four percent year on
year to P938 billion. A notable contributor was the nine-percent increase in
current and savings account deposits, which are generally less expensive
funding sources than time deposits.
These low-cost deposits represented 52 percent of the bank's
total deposits, improving from 49 percent a year earlier.
Net loans increased slightly by one percent to P680 billion,
while investment securities amounted to P380 billion. Total assets grew eight
percent to P1.23 trillion, reflecting the expansion of the bank's overall
balance sheet.
Capital positions remained above the minimum regulatory
requirements, with the common equity tier 1 ratio at 12.4 percent and the total
capital adequacy ratio at 13.3 percent.
Shareholders to receive additional cash dividends
Security Bank's board also declared a cash dividend of P1.50
per share for the second semester of 2026. This brings the bank's total
declared dividends for the year to P3 per share.
Despite the relatively modest increase in bottom-line
earnings, the bank's stronger operating profit, improving cost efficiency and
growing deposit base point to continued progress in its underlying business
performance. Its ability to sustain these improvements while managing credit
risks will remain an important factor in its financial performance moving
forward.
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