25 slides from Security Bank Corp. (philippines)'s earnings presentation, November 2014
Slide 1: Investor Presentation 9M 2014 Results
Investor Presentation 9M 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 Total SECB SBS Branches (2) Corporate Banking 254 215 39 Commercial/SME Banking ATMs (2) 468 418 50 Wholesale Banking Transaction Banking Investment Banking Equities Brokerage LUZON 48 Branches | 23% 10 Branches | 26% Consumer Finance Retail Banking METRO MANILA Branch Bank
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 Nov 05, 2014 150.50 Social Security 52 week range (L-H) 105.10-152.60 System 6% Market Cap (PhP mm) 91,449 2012 2013 9M-’14 Market Cap (US$ mm) 2,033
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) [9M‘-13: Return on Equity (%) (1) 9.6, +42%] 15 14.0 13.6 40 12.8 12.3 34.6 11.6 1.8 13% 1.5 11% 1.1 9% [9M‘-13: 1.7 14% 30 2.4 14.5] 10 20% 4.1 29% 3.6 26% 24.6 7.8 2.2 18% 22.0 5.6 43% 20.9 19.9 6.6 1.7 15% 19.2 1.2 16% 20 1.5 22% 0.7 9% 12.7 12.7 12.913.7 11.4 12.1
Slide 7: Profitability
Profitability Return on Assets (%) (1) Assets-to-Equity (2) 6 20 18.7 18 4.9 5 16 14 4 3.5 3.3 12 10.2 10.1 9.9 10.1 3 10 8.9 9.2 8.2 8.2 8.5 2.3 7.8 2.2 8 7.2 7.0 1.9 6.8 2 1.8 1.8 1.5 1.6 6 1.4 1.1 1.2 1.1 4 1 2 0 0 '08 '09 '10 '11 '12 '13 9M-'14 '08 '09 '10 '11 '12 '13 9M-'14 SECB Industry Avg [9
Slide 8: Cost Efficiency
Cost Efficiency Cost-to-Income Ratio (%) (2) Operating Expense (PhP Mn) (2) 80 7,000 6,751 [9M‘-13: 72.7 [9M‘-13: 5,017; +13%] 52.5] 5,972 70 6,000 5,671 63.9 64.0 63.5 61.5 61.7 36% 58.9 60 54.8 5,000 4,710 38% 50.9 49.5 4,326 37% 50 3,910 42.6 4,000 7% 42.2 34% 3,371 32% 40 37.0 36.9 7% 9% 7% 30%
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 4.0 4.1 4.1 4.1 4.1 8 3.9 4 7.1 7.0 3.5 3.5 3.4 3.3 3.2 7.3 6.0 5.9 3.0 6 6.6 3 6.1 5.1 4.5 4.2 5.1 4 3.4 4.7 2 3.0 4.0 4.0 2.3 2.1 3.0 1.8 1.6 2 1.3 1 2.4 1.9 1.8 1.6 1.1 1.0 0 0 '08 '09 '10 '11 '
Slide 10: Fee-Based Income
Fee-Based Income Diversified Fee Income (1) Service Charges, Fees and Commissions (PhP Mn) Miscellaneous, 1,600 1,561 Asset 5% 92 Mgt./Trust, Deposit, 16% 1,440 [9M-’13: 11% 181 1,192; +1%] 1,255 1,280 1,200 68 193 55 1,120 1,035 132 129 Advisory, 11% 964 39 960 892 229 60 869 120 218 136 63 34 41 8
Slide 11: Balance Sheet: Asset & Funding Structure
Balance Sheet: Asset & Funding Structure Total Assets (PhP Bn) Total Liabilities and Capital (PhP Bn) 400 400 366 366 348 348 350 350 27% 98 300 101 34% 300 259 259 250 250 206 67% 232 63% 215 24% 215 76 30% 87 200 82 13% 200 49 23% 55% 167 167 142 146 146 150 138 63 24% 150 138 119 55% 56 33% 11 5%
Slide 12: Loan Portfolio
Loan Portfolio Total Loans (PhP Bn) By Industry(1) 210 181 (1) Manufacturing 180 Others 14% 165 12 6% 22% 8 5% 150 120 71 40% 63 Wholesale/Retail 120 7 6% Trade 38% 92 Financial 20% 90 4 2% 42 35% Intermediation 75 67 70 13% 3 4% 33 3 5% 2 3% 60 28 38% 20 29% 23 33% 38% 94 57% 99 54% Real Estate 70
Slide 13: Deposit Portfolio
Deposit Portfolio Total Deposits (PhP Bn) (1) By Segment (2) 240 232 Retail 207 36% 200 Corporate 64% 160 143 151 65% 134 65% 119 120 109 111 103 88 62% By Currency (2) 80 69 58% 71 67 60% 65 63% 65% 40 FCDU 73 35% 81 35% 27% 50 42% 55 38% 38 37% 38 35% 44 40% 0 '08 '09 '10 '11 '12 '13 9M-'14 PHP Lo
Slide 14: Asset Quality
Asset Quality NPL Ratio and NPL Cover (%) (1) NPA Ratio and NPA Cover (%) 10 350 10 188 194 188 200 319 315 179 296 297 285 300 155 155 8 256 259 8 141 150 250 6 6 200 100 150 4 4 3.10 100 2.30 2.00 50 2 1.30 1.25 2 1.50 1.30 1.08 0.94 50 0.92 0.88 0.70 0.52 0.54 0 0 0 0 ’08 '09 '10 '11 '12 '13 9M-'
Slide 15: Capital Strength
Capital Strength Total CAR (%) Major Philippine Banks’ Capitalization (%) (2) 25 60 25 Median Tier 1 CAR = 13.2% 54 21.8 Median Total CAR = 15.1% 21.1 20.3 50 20 18.5 18.4 18.5 20 18.5 41 19.0 16.3 15.7 16.2 18.2 37 40 14.9 15.1 14.8 15.5 14.1 15 15 13.4 15.4 31 14.7 15.1 14.3 30 25 12.5 10 10 18 17
Slide 16: Dividends
Dividends Dividend Per Share (PhP) (1) Dividend Yield (%) (2) 2.5 25% 9.0 8.0 20% 20% 8.0 2.0 20% 7.0 0.5 0.5 6.0 1.5 0.5 1.0 1.0 1.0 1.0 15% 5.0 4.0 1.0 10% 3.2 3.0 2.3 1.5 1.5 2.1 1.3 0.5 5% 2.0 1.3 1.5 1.5 1.0 1.0 1.0 1.0 1.0 0.0 0% 0.0 '08 '09 '10 '11 '12 '13 9M-'14 '08 '09 '10 '11 '12 '13 9M-'1
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 Reach through Branch/Distribution Network 17
Slide 18: Annex
6 SECURITY BANK Annex
Slide 19: Security Bank history
Security Bank Total of 118 branches added since 2012; SBC has a total of 254 branches at present Embarked a rebranding campaign & Secured universal launched new corporate logo on banking license in April February 2014 Incorporated on May 1951 1994, allowing it to Partnered with FWD Life in as
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, Growth Stable Liquidity 3 4 Proven & Experienced Industry-Leading Management Asset Quality Team 21
Slide 22: 2012-2014 Initiatives
2012-2014 Initiatives › Acquisition closed – February 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 relocated t
Slide 23: Foundation Building Initiatives 2013-2014
Foundation Building Initiatives 2013-2014 10 Service Quality 8 9 Cards Business Online Positioning Channels 5 Improved 6 7 TAT on SBC Rebranding Consumer Academy Loans 1 2 3 4 Sales Force Organization Branch SAs (Sales Associates) & Lean & Performance Expansion SPOCs (Single Point of Branch Contact)
Slide 24: 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 Executive Office
Slide 25: Track Record of Excellence
Track Record of Excellence 2014 2014 2014 2014 2014 Best Cash Management Best Overall Domestic Solution (eSweep Card) - Best Bank Best Small Cap Equity Deal Best Investor Relations Provider of FX Services Philippines, of the Year in Southeast in the Philippines Companies - Philippines Best Service P