February 04, 2014

SECB nets P5b for FY13

Security Bank (SECB, Buy) yesterday disclosed that its net income reached P5b in 2013, translating to RoE of 13%. In the absence of huge trading gains last year, the bank’s 2013 earnings came in 33% lower YoY on high 2012 base. Nonetheless, the bank said that its capital adequacy ratio (CAR) remained high at 15.5% even after redeeming its Tier 2 Notes in December 2013. Moreover, its Tier 1 CAR was at 15.1% or well above BSP’s minimum requirements.

Our Take: SECB’s 2013 earnings came short of the most recent consensus forecast of P5.33b and our estimate of P5.75b. After earning P4.17b in 9M13, it appears that the bank only netted P834m in 4Q13. This is below the bank’s average quarterly earnings of P1.39b in the first three quarters of 2013. We will review our estimates pending more details on the results when the bank releases its audited financial statements.– WealthSec