Lender Security Bank expects a rebound to profitability this year on the back of improved loan margins and a sustained double-digit expansion in core lending activities.
Net profit this year is likely to grow over last year’s P8.6 billion, reversing the 16-percent drop in bottom line last year caused by slower trading gains and an increase in tax provision.
Security Bank president Alfonso Salcedo Jr. yesterday said the bank would likely grow its loan book by 13-15 percent this year from 12 percent last year.
At the same time, Salcedo sees a 10- to 15-basis point potential improvement in Security Bank’s net interest margin this year, from 3.4 percent in the fourth quarter of 2018.
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Salcedo expects a NIM improvement this year for the local banking industry in general, coming from an “irrational” period last year when a wave of stock right offerings that injected fresh capital into many banks prompted the lenders to lend at overly generous rates just to be able to deploy capital.
While the country has seen strong credit growth in the last seven years, with average increase at high-teens or low 20s, Salcedo assuaged concerns that the country might be nearing the end of the boom in the credit cycle.
