24 slides from Security Bank Corp. (philippines)'s earnings presentation, June 2013
Slide 1: Investor Presentation Q1 2013 Results
Investor Presentation Q1 2013 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 210 172 38 Banking Equities Brokerage ATMs 332 292 40 Transaction Banking Commercial Middle Commercial Financing LUZON Market Banking Small Business Lending 41 Branches | 24% 11 Branches | 29%
Slide 4: Market Data
Market Data Shareholders(2) Security Bank Corporation Dy Group Company Identifiers 42% Bloomberg SECB.PM Reuters SECB PS Others 53% Stock Price as of June 4, 2013 171.50 52 week range (L-H) 120.10-202.20 Social Security Market Cap (PhP mm) 86,154 System 5% Market Cap (US$ mm) 2,069 Avg Daily Trading
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 40 1.8 13% 1.1 9% 11.6 34.6 10 2.4 20% 4.1 29% 30 24.6 7.9 5.6 15% 43% 1.7 6.6 1.2 16% 20.9 21.9 14% 31% growth 19.2 [Q1’12] 1.5 22% 0.7 9% 58% 20 [Q1‘12: 2.3] 5 0.2 3% 13.0 48% 7.5 65% 8.1 3.0 5.9 75% 6.1 0.5 10 5.0 75% 0.6 17% 20% 1
Slide 7: Profitability
Profitability Return on Assets (%) Assets-to-Equity 6 12 4.9 10.2 5 10 8.2 Industry 4 8 Average : 3.5 7.1 8.0 6.8 6.9 3.3 6.6 6.7 3 Industry 6 [Q1’12] Average : 1.9% 2.2 2.0 2 1.8 4 2.1% [Q1’12] 1 2 - 0 '08 '09 '10 '11 '12 Q1 '13 '08 '09 '10 '11 '12 Q1 '13 7
Slide 8: Cost Efficiency
Cost Efficiency Cost-to-Income Ratio (%) Operating Expense (PhP Mn) 49.3% 60 7,000 [Q1’12] 54.2 6,020 50.9 49.5 6,000 50 42.9 5,000 37% 40 37.0 36.9 4,284 3,907 3,913 4,000 3,581 7% 30 29% 37% 36% 8% 3,000 33% 7% OPEX : 1,151 9% 14% [Q1’12] 20 9% 8% 9% 9% 2,000 8% 7% 9% 1,658 15% 5% 7% 40% 10 1,000
Slide 9: Net Interest Margin
Net Interest Margin Asset Yields vs. Funding Cost (%) (1) Net Interest Margin (%) 10 5 4.5 4.4 7.8 4.0 3.9 4.1 4.1 8 3.9 4 3.6 6.6 3.5 3.6 3.4 3.4 7.3 5.9 6 5.7 6.5 5.1 3 5.0 4.4 5.4 5.1 4.9 4 5.1 2 2.5 2.3 2.0 1.9 3.0 1.9 2 2.4 1 2.1 2.0 1.6 1.6 0 - '08 '09 '10 '11 '12 Q1 '13 '08 '09 '10 '11 '12 Q1
Slide 10: Fee-Based Income
Fee-Based Income Diversified Fee Income (1) Service Charges, Fees and Commissions (PhP Mn) 1,200 1,123 Miscellaneous 68 6% Deposit 1,000 Transaction Fees 22% 900 915 218 Advisory Fees (Capital Markets 39 60 Services) 789 799 104 19% 800 63 34 41 168 107 64 52 174 98 124 600 167 248 60% growth 180 [Q
Slide 11: Balance Sheet: Asset & Funding Structure
Balance Sheet: Asset & Funding Structure Total Assets (PhP Bn) Total Liabilities and Capital (PhP Bn) 20% YoY 300 growth [Q1’12: 216] 300 259 259 259 259 250 250 215 76 30% 84 32% 215 200 55% 55% 167 49 23% 200 55% 142 142 167 146 150 138 63 24% 56 22% 146 119 23% 56 33% 150 138 66% 25 18% 33 74 34%
Slide 12: Loan Portfolio
Loan Portfolio Total Loans (PhP Bn) (1) 21% YoY By Industry(1) growth [Q1’12: 99] 119 119 Manufacturing 120 16% 7% 7% Others (2) 30% 100 Wholesale/ 92 35% 35% Trading 1% 19% 80 75 67 70 4% 38% 5% 3% 60 37% Financial 29% 31% Intermediaries 40 6% 58% 58% 56% 66% 62% 57% Real Estate 20 10% Utilities 19
Slide 13: Deposit Portfolio
Deposit Portfolio Total Deposits (PhP Bn) (1) By Segment(2) 22% YoY growth [Q1’12: 117] Retail/ Corporate 142 142 Commercial 75% 140 25% 119 120 109 111 103 100 85 83 60% 58% 69 58% 80 67 65 71 60% By Currency(2) 65% 63% 60 42% 40% 42% FCDU PhP 40 76% 24% 35% 40% 58 59 50 20 37% 44 38 38 0 '08 '09 '
Slide 14: Asset Quality
Asset Quality NPL Ratio and NPL Cover (%) NPA Ratio and NPA Cover (%) 10 319 315 350 10 200 170 174 175 296 283 157 300 151 8 256 8 139 150 218 250 6 200 6 100 4 150 4 3.3 100 2.4 2.2 1.8 1.6 1.6 50 2 1.3 1.3 1.1 2 0.9 50 0.7 0.7 - - - - ’08 '09 '10 '11 '12 Q1 '13 ’08 '09 '10 '11 '12 Q1 '13 NPL Rati
Slide 15: Capital Strength
Capital Strength Total CAR (%) (1) Major Philippine Banks’ Capitalization (%) 25 45 Median Tier 1 CAR = 15.9% Median Total CAR = 17.9% 21.8 20.3 25 20 18.5 18.4 19.0 35 21.7 19.0 19.9 16.3 20 19.0 18.4 18.2 17.1 16.9 17.3 15 25 16.7 15.4 15.3 14.7 17.1 16.5 15 16.6 15.9 14.8 14.9 13.9 15.8 12.5 10 1
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 6.0 1.5 1.00 1.00 15% 5.0 1.50 1.50 1.25 4.0 1.0 10% 3.2 3.0 2.5 0.50 2.3 2.1 2.0 0.5 13.0% 1.00 1.00 5% 1.3 0.50 0.50 0.50 0.50 1.0 0.0 0% 0.0 '08 '09 '10 '11 '12 Q1 '13 '07 '08 '09 '10 '11 '12 Cash - Regu
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: 250 branches in mid-2014 17
Slide 18: Annex
9 SECURITY BANK Annex
Slide 19: Security Bank
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 (SBTC) broaden the scope of its in June 2011 financial services. 1951 1989 1994 1995 2011 2012 New majori
Slide 20: Key Financials
Key Financials Net Income After Tax Total Resources 8,000 7,498 300 7,160 259 7,000 6,701 250 6,000 215 200 5,000 167 138 146 4,000 150 129 122 3,062 105 3,000 2,709 2,310 100 88 1,901 69 74 2,000 1,160 50 1,000 502 631 694 - - 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2002 2003 2004 20
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 2012 2012 2012 2012 2012 Philippine Dealing and Exchange Corporation Best Mid-Cap Company Best Vanilla/Structured Best Securities House For 8 Bank of the Year - Strongest Bank in the Best Managed Companies of Loan Deal Of The Year For Consecutive Years Philippines Philippi