Security Bank’s lending business likely to sustain expansion in 2017
SECURITY BANK Corp. (Security Bank) is looking to sustain the growth in its lending business at around 20% this year to accommodate borrowers in key economic sectors, according to the bank’s chief executive, with the government also focused on spending on the country’s infrastructure.
“Security Bank will be looking to sustain its loan growth at around mid-20% as we continue to support key sectors such as power, infrastructure, food manufacturing, wholesale and retail trade, among others,” Alfonso L. Salcedo, Jr., president and chief executive officer of Security Bank, told BusinessWorld in an e-mail when asked for the bank’s growth prospects in terms of its lending activities.
The bank’s total loans and receivables in the January to September period last year reached P268.2 billion, up 24% from the P216.9 billion raked in the same period in 2015. Both of the listed lender’s corporate and commercial loans in the first nine months ended September 2016 rose 20% year on year, while the bank’s retail lending business accelerated during the period on the back of a growth of more than 80% year on year in both its auto and home loans.
“Infrastructure spending by the government will be a bright spot in 2017. This will have sizeable multiplier effects on our economy. As such, the banking industry is looking forward to another vibrant year,” Mr. Salcedo noted.
The current administration under President Rodrigo R. Duterte is looking to allot as much as P9 trillion over the next six years for government-funded infrastructure projects.
Mr. Salcedo added that Security Bank’s collaboration with Bank of Tokyo-Mitsubishi UFJ Ltd. (BTMU) “will play a key role in supporting project finance deals in the country in the medium term.”
Security Bank secured the central bank’s approval of its partnership with BTMU last Feb. 24, 2016. Last April 1, the country’s sixth largest lender in asset terms completed its partnership deal with BTMU, with Security Bank receiving the P36.9 billion capital infusion from Japan’s largest bank that gave it a 20% stake in the local lender.
In the third quarter of 2016, the bank’s capital stood at P96 billion, with its total capital adequacy ratio at 21.0%, while its common equity Tier 1 ratio was at 18.4%.
Shares in Security Bank gained 80 centavos or 0.38% on Monday to end at P213.80 apiece.
