18 slides from Security Bank Corp. (philippines)'s earnings presentation, Mar 12, 2018
Slide 1: FY 2017 Results Highlights
FY 2017 Results Highlights By: Mr. Alfonso L. Salcedo, Jr., President & CEO March 12, 2018
Slide 2: Profitability
CAGR 2013-2017: Profitability Net Income: 20% Net Income After Tax (PhP Mn) +20% YoY 10,265 8,554 7,699 7,164 5,012 '13 '14 '15 '16 '17 Cost-to-Income (%) (1) Return on Equity (%) (2) 61.2 63.6 63.0 63.3 58.9 54.8 51.3 50.2 49.8 47.3 16.3 15.2 12.9 13.7 11.0 10.4 10.5 10.2 9.4 9.96 '13 '14 '15 '16 '
Slide 3: Revenues (PhP Bn)
Revenues (PhP Bn) CAGR 2013-2017: Net Interest Income: 23% Trading Gains: 1% Fees & Other Income: 21% Total Revenues: 20% 25.1 3.3 14% 20.8 2.4 6% 18.3 15% 3.2 16.6 3.1 19% 1.8 9% 1.9 12% 12.1 2.8 15% 3.6 21% 1.5 14% 18% 80% 2.2 19.4 15.9 76% 67% 12.4 66% 11.1 8.4 68% '13 '14 '15 '16 '17 Net Int. In
Slide 4: Loan Portfolio
Loan Portfolio Total Loans (PhP Bn) 369 57 16% 289 CAGR 2013-2017: 38 13% Corporate: 18% 238 127 34% Middle Market: 20% 24 10% Consumer: 63% 194 Total: 22% 107 37% 165 14 7% 8 5% 92 39% 77 40% 62 38% 185 50% 144 50% 122 51% 95 57% 103 53% '13 '14 '15 '16 '17 Corporate Middle Market Consumer Note: Nu
Slide 5: Deposit Portfolio
Deposit Portfolio Total Deposits (PhP Bn) (1) By Segment 413 Retail 39% 347 Corporate 61% 290 250 61% 247 208 60% 206 174 62% 153 65% CAGR 2013-2017: 133 62% Low-Cost: 22% Other Deposits: 17% 163 39% Total: 19% 138 40% 116 38% 94 35% 73 38% '13 '14 '15 '16 '17 Low Cost CASA Other Deposits Note: (1)
Slide 6: Strategy: 2013 to Present
Strategy: 2013 to Present Build Retail Banking into a strong third business pillar complementing our Wholesale and Financial Markets businesses. Rationale: › Create a steady-growth and higher margin business. › Minimize dependency on trading gains. 2012 Revenue Sources In % Net Interest Income 58 Tr
Slide 7: Net Interest Margin from Loans and Deposits by Segment
Net Interest Margin from Loans and Deposits by Segment FY 2016 FY 2017 Corporate Corporate Consumer 28% Consumer 28% 37% 41% Middle Middle Market Market 35% 31% Source: SECB 17-A 2017 Segment Information 7
Slide 8: Major Investments in Manpower, Branch Expansion and I.T.
Major Investments in Manpower, Branch Expansion and I.T. I. Manpower 2012 2017 Increase # % Retail Lending / Branches 1,977 3,416 1,439 73 Business Support & I.T. 479 893 414 86 All Others 764 1,128 364 48 Total 3,220 5,437 2,217 69 8
Slide 9: Major Investments in Manpower, Branch Expansion and I.T.
Major Investments in Manpower, Branch Expansion and I.T. II. Branch Expansion Jan. 2012 Dec. 2017 Increase # % Metro Manila 73 180 107 147 Luzon 36 69 33 92 Visayas 14 27 13 93 Mindanao 14 27 13 93 Total 137 303 166 121 9
Slide 10: Major Investments in Manpower, Branch Expansion and I.T.
Major Investments in Manpower, Branch Expansion and I.T. III. I.T. In PhP Millions 2012 2017 Increase PhP % Depreciation, Amortization, Repair & Maintenance of I.T. 141 498 357 253 Hardware & Software 10
Slide 11: Asset Quality
Asset Quality NPL Cover and Ratio (%) (1) 305 2 NPL Cover (%) 239 255 205 SECB 200 204 195 205 144 142 145 150 141 155 Industry 105 Net NPL Ratio (%) (1) 55 0.47 0.38 0.28 0.30 0.32 0.19 0.17 5 0.11 0.14 0.02 0 -45 '13 '14 '15 '16 '17 NPL Ratio Industry NPL Ratio NPL Cover Industry NPL Cover Note: (
Slide 12: Capital Strength
Capital Strength Total CAR (%) Major Philippine Banks’ Capitalization (%) (2) Median CET1 Ratio = 13.3% 17.7 Median Total CAR = 15.1% 15.4 15.5 20.3 20.5 14.4 14.4 14.5 14.3 14.0 15.5 18.4 12.7 17.7 14.6 16.3 13.5 18.2 15.5 18.0 12.9 15.2 12.5 12.1 11.8 11.8 15.5 11.3 14.7 15.1 14.3 12.2 (1) '11 '12
Slide 13: Balance Sheet: Asset & Funding Structure
Balance Sheet: Asset & Funding Structure Total Assets (PhP Bn) Total Liabilities and Capital (PhP Bn) 756 756 695 695 152 20% 156 22% 532 532 413 55% 347 50% 198 26% 397 105 20% 397 348 222 32% 36 5% 348 290 55% 90 23% 175 33% 40 6% 44 6% 103 30% 28 4% 247 62% 101 25% 15 2% 206 59% 39 7% 70 20% 14 4
Slide 14: 2018 Strategic Overview
2018 Strategic Overview • Improve ROE with end-view to have industry-leading ROE among the top 10 private domestic universal banks over the medium term. • Continue growth momentum to build the Retail Banking Business as the third business pillar of the Bank (complementing Wholesale Banking and Finan
Slide 15: 2018 Strategic Overview
2018 Strategic Overview • Transform the Bank’s infrastructure to support our growth aspirations and deliver our BetterBanking promise. - I.T. Platform - Scalable end-to-end Consumer Finance Platform (from applications- approval-loan disbursements) - Branch Network - Digitalization to: (i) augment di
Slide 16: 2018 Key Objectives
2018 Key Objectives I. Improve Net Interest Margin by: A. Aggressively growing PhP low-cost CASA B. Sustaining growth trajectory of Retail Loans, particularly higher margin products • Housing Loans • Auto Loans • Credit Cards • Personal Loans • Small Business Loans 16
Slide 17: 2018 Key Objectives
2018 Key Objectives II. Improve Fee Income • Bancassurance • Advisory and Loan Fees • Deposit Charges III. Continue to profitably grow Wholesale Business (corporate & middle market) IV. Significantly grow Japanese Business 17
Slide 18: Summary
Summary Continue Execution of the Third Business Pillar Strategy (Retail Banking Business) - Demographic Dividend - Consumption-led Economy - High growth economy – 7% GDP growth Wholesale Banking to Capitalize on: - “Build, Build, Build / Golden Age of Infrastructure” - Middle Market Ecosystems - St