As lenders jacked up for possible credit defaults in the midst of the ongoing coronavirus pandemic, Security Bank incurred a 63.9-percent year-on-year decline in Q3 with a net profit to P1 billion.
Based on a regulatory report, this took the bank’s 9 month net profit to P6.7-B down 12.9 % year on year.
Security Bank reserved P10-B as a loan casualty cushion for the Q3 alone, rising from just P1.1-B in the same time last year. This culminated in a nine-month loan loss allowance for P21.1 billion, a dozen times more than the buffer in the same timeframe last year.
With this provisioned amount, the bank has reserved 1.22 for every bad debt.
Bad debts increased to 4.03 % of the total loans at the end of September compared to 1.58 % at the end of June, mainly because of the economic challenges from the pandemic.
“While profits, margins and resources are robust, the bank has remained proactive in providing credit considering the economic difficulties of the pandemic. We are prudently serving our customers, continuing diligence in risk control and engaging in measures to improve our facilities,” said Sanjiv Vohra, President of the Protection Bank and Chief Executive Officer.
In the first 9 months, net profit of the bank rose by 120% year on year to P24.8-B on higher interest earnings and trading earnings. For the Q3 alone the forecasted net profit has rose to P9.2-B by 120% year on year.
The Security Bank invested just 38.4 cents to earn every peso in the first 9 months, more productive than the 53.3 cents it spent to earn every peso a year before.
Total net interest income for the nine-month cycle rose by 24 percent year-on-year to P23.4 billion. Total net interest income rose by 8 percent year-on-year to P7.6 billion for the third period.
Over the nine-month duration the gross net interest revenue rose by 24 percent annually to P23.4 billion. Total net interest sales rose by 8% on year to P7.6 billion for the Q3.
The net interest margin of the bank increased annually by 88 basis points, and in the third quarter by 26 basis points to 4.9 percent.
Total loans amounted to P431 billion, down 3% year on year and 4% quarter on quarter. Retail loans rose by 2 % year-on-year, accounting for 26 percent of overall loans. In contrast with the year-ago pace, wholesale loans were down.
In the other side, nine-month operating costs, premiums and commissions dropped by 10% year-on-year to P2.6 billion.