24 slides from Security Bank Corp. (philippines)'s earnings presentation, May 2014
Slide 1: Investor Presentation Q1 2014 Results
Investor Presentation Q1 2014 Results
Slide 2: Table of Contents
Table of Contents Our Company 3 Market Data 4 Banking Industry 5 Profitability 6 Cost Efficiency 8 Net Interest Margin 9 Fee-Based Income 10 Balance Sheet 11 Loan Portfolio 12 Deposit Portfolio 13 Asset Quality 14 Capital Strength 15 Dividends 16 Medium-Term Focus 17 Annex History 19 Key Financials
Slide 3: Our Company
Our Company Corporate Banking Total SECB SBS Corporate & Investment Investment Banking Branches* 244 204 40 Banking Equities Brokerage ATMs* 416 365 51 Transaction Banking Commercial Middle Commercial Financing LUZON Market Banking Small Business Lending 47 Branches | 23% 10 Branches | 2
Slide 4: Market Data
Market Data Shareholders(2) Security Bank Corporation Dy Group Company Identifiers 42% Bloomberg SECB.PM Reuters SECB PS Others 52% Stock Price as of May 14, 2014 122.50 52 week range (L-H) 105.70-172.00 Social Security Market Cap (PhP mm) 73,847 System 6% Market Cap (US$ mm) 1,690 PhP183 M / USD 3-
Slide 5: Banking Industry
SECB has roughly 4% market share in total assets, loans & deposits in 36-bank universal/commercial bank industry in the Banking Industry Philippines. SECB is driven by profitability first and foremost & will pursue aggressive build-up in market share if it improves profitability & shareholder value.
Slide 6: Profitability
Profitability Revenues (PhP Bn) Return on Equity (%) 15 14.0 12.9 12.3 40 11.7 1.8 13% 34.6 1.1 9% 1.7 14% 10 2.4 20% 4.1 29% 30 2.2 7.9 18% 24.6 5.6 43% 1.7 15% 22.0 6.6 [Q1-‘13: 3.1; 19.2 20.9 [Q1‘-13: 13.0] 1.2 16% 22% 0.7 9% +17%] 20 1.5 3.6 13.8 5 0.2 3% 12.9 7.5 65% 8.1 58% 8.4 68% 0.5 14% 5.9
Slide 7: Profitability
Profitability Return on Assets (%) Assets-to-Equity 12 6 Peer 10.2 Average: 4.9 10 9.4 5 9.0 8.5 8.2 4 8 7.2 3.5 6.8 7.0 3.3 3 6 Peer 2.2 Average: 1.1 2 1.8 4 1.8 1.6 1 2 - 0 '08 '09 '10 '11 '12 '13 Q1-'14 '08 '09 '10 '11 '12 '13 Q1-'14 [Q1-’13: 2.0] [Q1-13: 6.8 ] 7
Slide 8: Cost Efficiency
Cost Efficiency (1) Cost-to-Income Ratio (%) 7,000 Operating Expense (PhP Mn) 60 6,752 54.8 [Q1’-13: 54.2] 5,972 50.9 6,000 49.5 48.4 50 36% 5,000 4,710 42.6 38% 4,346 40 37.0 36.9 3,911 4,000 34% 7% 3,364 32% 7% 9% 30 30% 3,000 23% 6% 8% 7% 14% [Q1’-13: 1,658; 7% 8% +4.1%] 8% 8% 14% 20 8% 1,725 11%
Slide 9: Net Interest Margin
Net Interest Margin Asset Yields vs. Funding Cost (%) (1) (2) Net Interest Margin (%) (2) 10 5 4.5 4.4 7.8 4.0 3.9 4.1 4.1 8 3.9 4 3.6 3.5 6.6 3.5 3.4 3.5 5.9 3.2 3.2 7.3 5.7 6 3 6.5 5.0 4.8 4.7 4.4 5.4 5.1 5.1 4 2 4.5 4.5 2.5 2.3 2.0 1.8 1.8 2 3.0 1.2 1 2.4 2.1 2.0 1.6 1.4 1.4 0 - '08 '09 '10 '11 '
Slide 10: Fee-Based Income
Fee-Based Income Diversified Fee Income (1) Service Charges, Fees and Commissions (PhP Mn) 1,561 Miscellaneous, 6% 1,600 Asset Mgt./ Deposit, 15% 92 Trust, 12% 1,440 1,255 181 1,280 68 1,035 193 Advisory, 1,120 964 132 12% 869 892 39 229 960 60 120 218 63 41 34 104 800 63 79 93 174 168 107 64 52 [Q1
Slide 11: Balance Sheet: Asset & Funding Structure
Balance Sheet: Asset & Funding Structure Total Assets (PhP Bn) Total Liabilities and Capital (PhP Bn) 377 377 400 348 400 348 350 350 82 22% 259 259 300 101 34% 300 215 215 211 56% 250 250 206 67% 129 34% 76 30% 200 166 82 13% 200 166 146 49 23% 146 142 55% 138 138 119 55% 13 3% 150 63 24% 150 56 33
Slide 12: Loan Portfolio
Loan Portfolio Total Loans (PhP Bn) By Industry(1) Manufacturing 165 166 Others (1) 15% 5% 5% 26% 165 132 119 38% 38% 7% 99 92 2% 35% 70 75 67 4% Financial 5% 3% 38% Intermediaries 66 9% 33% 38% 29% 57% 57% Wholesale 33 Retail 58% Trade 60% 64% 20% 66% 58% Real Estate 0 12% '08 '09 '10 '11 '12 '13 Q
Slide 13: Deposit Portfolio
Deposit Portfolio Total Deposits (PhP Bn) (1) By Segment (2) Retail/ 220 211 Corporate 206 Commercial 74% 200 26% 180 160 142 131 62% 140 134 65% 119 120 103 109 111 100 88 62% 80 69 58% By Currency 67 60% 65 63% 71 65% 60 FCDU PhP 40 73 35% 80 38% 19% 81% 38% 50 42% 55 20 38 37% 38 35% 44 40% 0 '08
Slide 14: Asset Quality
Asset Quality NPL Ratio and NPL Cover (%) (1) NPA Ratio and NPA Cover (%) 188 194 10 319 350 10 179 200 315 296 160 285 275 155 155 300 8 256 259 8 141 150 250 6 6 200 100 4 150 4 3.1 2.3 100 2.0 50 2 1.5 1.3 2 1.3 1.3 1.1 0.9 0.7 50 0.9 1.0 0.5 0.5 - - - - ’08 '09 '10 '11 '12 '13 Q1-'14 ’08 '09 '10
Slide 15: Capital Strength
Capital Strength Total CAR (%) Major Philippine Banks’ Capitalization (%) (2) 25 45 Median Tier 1 CAR = 13.5% 25 42 Median Total CAR = 14.0% 21.8 41 20.3 37 20 19.5 18.5 18.4 20 35 19.0 30 16.3 16.0 15.5 16.0 18.2 14.6 14.8 15 25 14.0 15 25 15.4 15.1 14.0 16.1 15.2 14.7 13.5 11.3 13.9 12.8 11.5 12.5
Slide 16: Dividends
Dividends Dividend Per Share (PhP) (1) Dividend Yield (%) (2) 2.5 25% 9.0 8.0 8.0 2.0 20% 7.0 0.50 0.50 6.0 1.5 0.50 1.00 1.00 1.00 15% 5.0 4.0 1.0 10% 3.2 3.0 1.50 1.50 0.50 2.3 1.25 2.1 0.5 1.00 1.00 1.00 5% 2.0 1.5 1.6 1.3 0.50 1.0 0.0 0% 0.0 '08 '09 '10 '11 '12 '13 Q1-'14 '08 '09 '10 '11 '12 '13
Slide 17: Medium-Term Focus
Medium-Term Focus Sustain Leading Return on Shareholders’ Equity Grow the High-Margin Retail Banking Business Grow Our Core Strengths: Wholesale Banking and Financial Markets Expand Branch/Distribution Network: 260 branches in 2014 17
Slide 18: Annex
6 SECURITY BANK Annex
Slide 19: History
Security Bank Established on June 18, Granted a universal Corporation 1951 as Security Bank banking license by BSP in celebrated its and Trust Company April 1994, allowing it to 60th anniversary Re-branding & new corporate (SBTC). broaden the scope of its in June 2011. logo launched on Feb. 23, fina
Slide 20: Key Financials
Key Financials Net Income After Tax Total Resources 8,000 7,516 400 7,160 348 7,000 6,682 350 6,000 300 259 5,012 5,000 250 215 4,000 200 166 3,062 146 3,000 2,709 150 129 138 122 2,310 105 1,901 88 2,000 100 69 74 1,160 1,000 631 694 50 502 - - 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Slide 21: Business Proposition
Business Proposition 1 Core Franchise Strength 5 2 Strategy for Well Sustainable Capitalized, Stable Growth Liquidity 4 Proven & 3 Experienced Industry-Leading Management Asset Quality Team 21
Slide 22: 2012 Initiatives
2012 Initiatives › Acquisition closed – Feb. 1, 2012 Security Bank Savings › Balance sheet: assets - PhP 5bn; loans - PhP 3bn (Formerly Premiere › Purchase price - PhP 1.3bn, all cash; price-to-book – 1.7x Development Bank) › Branches: 38 all in Metro Manila & Luzon, 10 branches to be relocated to r
Slide 23: Management Team
Management Team Alberto S. Villarosa President and Chief Executive Officer Over 30 years of experience and leadership in the industry, having worked for BPI, CityTrust and Citibank in key management positions. Rafael S. Algarra, Jr. Executive Vice President-Financial Markets Segment Over 15 years of
Slide 24: Track Record of Excellence
Track Record of Excellence 2014 2014 2014 2014 2013 Best Cash Management Solution (eSweep Card) - Best Investor Relations Best Investor Relations Philippines, Company - Philippines, Excellence in Payment Best Managed Bank in the Company - Philippines Best Service Provider / Best CEO (Investor Innova