Banking

Security Bank Predicts Profit Growth; 4 New Banking Apps to Launch in 2024

Security Bank Corp. is poised for an uplift in profitability in the coming year, buoyed by robust growth in its lending operations and strategic investments in technology and infrastructure.

Eduardo Olbes

At a recent roundtable with journalists, Security Bank Executive Vice President and Chief Financial Officer, Eduardo Olbes, highlighted the potential for a substantial growth in profits.

“The journey of improving profitability is a multi-year one, but our aspiration obviously is to show significantly improved profitability this year versus last year,”

Eduardo remarked.

Despite a downturn in net 2023 income, where figures fell by 13.7% to PHP 9.1 billion from PHP 10.6 billion the previous year, Eduardo remains optimistic. The decline was largely attributed to increased credit costs, which rose primarily due to higher provisions set aside for bad debts amid challenging interest rate conditions.

Last year, the bank allocated PHP 4.8 billion for credit and impairment losses, marking a 69% increase from the previous year. The non-performing loan (NPL) ratio also deteriorated, rising to 1.37% from 1.05%.

Looking ahead, Security Bank anticipates a normalisation of credit costs as early as the first quarter of this year and expects a significant 14% to 15% increase in lending, particularly for home and auto loans.

“The bank will continue to make its investments in terms of technology and branch expansion, and that will continue to remain. When you make these investments, it obviously impacts your costs,”

said Eduardo. He further added,

“But what you should expect in parallel with that is a significant growth or acceleration in the bank’s revenues as we grow our business with our target market.”

Sanjiv Vohra, President and CEO of Security Bank, echoed this sentiment, outlining the bank’s commitment to enhancing customer-centricity and increasing market share in the Philippines.

As part of its strategy, the bank plans to roll out four new mobile applications this year, starting with a retail app in the second half of the year, followed by apps for wholesale and MSME operations in the third quarter, and a dedicated wealth management app in the fourth quarter.

Sanjiv Vohra

Sanjiv also highlighted the bank’s focus on providing an omni-channel experience that ensures consistency across all customer touchpoints.

“We have other initiatives to try to drive growth this year. But you should expect (growth) to manifest with us growing faster than the competition in 2025. And where you would see that is how is our deposit growth versus the industry, or how is our customer growth relative to the industry,”

he concluded.

Featured image credit: Edited from Freepik