Security Bank profit up 21% in Q1 amid pandemic concerns

Security Bank Corporation posted a 21 percent increase in net profit, reaching P2.9 billion in the first quarter of 2020.

This profit jump was fueled by a 75 percent surge in total revenues to P13.2 billion, driven by strong core business income and significant gains from securities trading.

Excluding trading gains, total revenues still saw a substantial 41 percent rise to P9.7 billion, with net interest income growing 41 percent to P8.1 billion and net interest margin improving to 4.68 percent.

Securities trading gains alone increased by 420 percent to P3.5 billion compared to the previous year.

Despite a 28 percent increase in operating expenses due to expansion, the bank's cost-to-income ratio improved to 39.4 percent from 53.7 percent.

Pre-provision operating profit doubled to P8 billion year-on-year.

However, the bank significantly increased its provisions for credit losses to P5.7 billion in Q1 2020, surpassing the full-year 2019 total.

This substantial increase in provisions was attributed to credit model adjustments, challenges in consumer and commercial lending, and a shift towards more consumer loans within the loan portfolio.

In response to the pandemic's potential impact on clients, Security Bank has initiated portfolio reviews, reassessed provisioning, and enhanced client engagement.