Security Bank earns less sans forex gains

MANILA, Philippines - Lack of extraordinary gains dragged down Security Bank Corp.’s quarterly earnings but bank president Alberto S. Villarosa said core business continue to provide solid foundation. In a disclosure, Security Bank said net income slipped by 10 percent to P750 million but this is better than the targets for the period and on track towards full-year goals. Security Bank generated higher profits with the money shareholders have invested compared to full year of 2008 although its net income went down during the first quarter on lack of extraordinary gains. “We are very pleased with our first quarter business and financial results specifically the significant and steady growth in our core businesses even as we prudently risk manage the earnings stream from our volatile trading activities," Villarosa said. Return-on-equity (RoE), which measures the bank’s profitability, was better at 23 percent than 19 percent posted for 2008 but this is less than 26.6 percent posted the same period in 2008. Security Bank chief financial officer Carlos M. Borromeo said the bank’s balance sheet remains healthy as the loan growth reflects a “significant shift" with loans accounting for 48 percent of the total assets from 38 percent in 2008. “This growth has been achieved while improving asset quality indices and capital strength," he said. Year-on-year, loan portfolio grew by 38 percent to P67 billion while deposit base rose 28 percent to P108 billion with net interest income improving by a quarter to P1.4 billion. In 2008, it recorded “extraordinarily high" levels of securities and foreign exchange gains. These revenue components slipped by 60 percent in the first three months of 2009 to P360 million. Fees, commissions, service charges and miscellaneous income slid by 18 percent to P258 million on one-off asset disposal gains posted in 2008. “While we recognize that the dislocation brought about by the current global financial crisis has yet to fully stabilize, we continue to maintain an outlook of guarded optimism for the country and for Security Bank in particular," Villarosa said. Its bad loans corner 1.4 percent of the total loan portfolio, better than 2. 8 percent the same period of 2008. Its capital adequacy ratio, which measures bank's capital, went down to 14.3 percent from 17 percent. -Ruby Anne M. Rubio, GMANews.TV