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Bond: SECBPM 5.5 29
Security Bank (PH)
- Sector: Financial Services
- Sub Sector: Banks
- Country: Philippines
- Bond: SECBPM 5.5 29
- Indicative Yield-to-Maturity (YTM): 4.694%
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Fundamental View
AS OF 04 Mar 2026Security Bank has historically been a wholesale focused bank. Rapid retail expansion pre-pandemic led to a large asset quality hit when COVID-19 struck. The bank completed revamping its underwriting processes at end-2021 and has resumed brisk growth in the retail book since.
The bank had a less well-established deposit franchise than most peers, resulting in a heavy hit to NIMs when rates rose this cycle. This has led it to focus aggressively on growing the higher yielding retail and MSME segments, the latter via forming a new business banking segment in 2022.
Previously high capital ratios have hence fallen; the CET1 ratio is a low 12-13%.
MUFG is a 20% shareholder of Security Bank.
Business Description
AS OF 04 Mar 2026- Security Bank was established in 1951 and obtained its universal banking license from the BSP in 1994. It is today the 9th largest bank in the Philippines.
- The bank is majority-owned by longtime owner Frederick Y. Dy (23.7%) and MUFG Bank (20%), which acquired its stake in April 2016.
- SB Finance, a joint venture between Security Bank and Thailand's Bank of Ayudhya (Krungsri), a consolidated subsidiary of MUFG, was launched in 2019. The unit is a consumer finance company formed to engage in the unsecured loans business in the Philippines, focusing on the lower mass retail segment.
- Security Bank's loan portfolio is 32% consumer, 4% MSME and 64% wholesale at 4Q25. The consumer and MSME book is roughly split mortgages (44%), auto loans (23%), credit card (23%) and small business loans (10%).
Risk & Catalysts
AS OF 04 Mar 2026Any rating downgrade of the Philippine sovereign would have a negative impact on Security Bank.
RRR cuts and rates coming down, along with brisk growth in higher yielding but riskier retail and MSME (business banking), are supporting the NIM well. Asset quality indicators however have unsurprisingly started to weaken with a jump in credit costs. We remain cautious given the relatively thin reserve cover and capital buffer. Management is now exercising some prudence in retail loan growth after the emergence of stress in credit cards.
Capital ratios have fallen due to brisk RWA growth and now trail peers. We view current levels as low, but do not rule out capital support from MUFG if needed.
A prolonged hit to sentiment from the flood controls scandal would exacerbate the slowdown in GDP and credit growth, and pressure asset quality.
Key Metric
AS OF 04 Mar 2026| PHP mn | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| Net Interest Margin | 4.43% | 4.23% | 4.49% | 4.73% | 4.66% |
| ROA | 1.0% | 1.4% | 1.1% | 1.1% | 1.0% |
| ROE | 5.6% | 8.4% | 7.0% | 8.1% | 7.9% |
| PPP ROA | 2.30% | 2.17% | 1.97% | 2.18% | 2.38% |
| CET1 Ratio | 19.1% | 16.1% | 15.3% | 12.9% | 12.3% |
| Total Equity/Total Assets | 17.88% | 14.94% | 15.62% | 12.50% | 12.91% |
| Gross NPL Ratio | 3.94% | 2.95% | 3.36% | 2.85% | 2.89% |
| Net LDR | 85.7% | 83.0% | 88.8% | 84.6% | 74.9% |
| Liquidity Coverage Ratio | 150% | 144% | 158% | 178% | 200% |
| Net Stable Funding Ratio | 138% | 122% | 131% | 130% | 146% |
CreditSight View Comment
AS OF 06 Mar 2026Security Bank has historically been a wholesale focused bank. Rapid retail expansion leading up to the pandemic led to a large asset quality fallout. It was conservative for a few years, but resumed aggressive growth in higher yielding but riskier retail and MSME segments to counter NIM pressure. This along with improving funding costs from a declining rate environment has supported margins. Asset quality however is showing stress from the brisk growth in riskier segments as we had anticipated, leading it to start exercising prudence in retail loan growth starting 2H25. We remain cautious about asset quality strains given the relatively thin capital buffer (12.3% CET1 ratio).
Recommendation Reviewed: March 06, 2026
Recommendation Changed: May 21, 2024
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Search topics about wealth insights and investments.Security Bank
- Sector: Financial Services
- Sub Sector: Banks
- Country: Philippines
- Bond: SECBPM 5.5 29
- Indicative Yield-to-Maturity (YTM): 4.704%
Access this content:
If you are an existing investor, log in first to your Metrobank Wealth Manager account.
If you wish to start your wealth journey with us, click the “How To Sign Up” button.
Fundamental View
AS OF 27 Feb 2025- Security Bank is the 7th largest bank in the Philippines by total assets and was established on June 18, 1951. Its dollar bonds provide better yield pickup compared to its nearest comparable. We remain comfortable with the bond given Security Bank’s total capital ratio of 14.20%, which is 400 basis points above the minimum regulatory hurdle, which can buffer modest credit losses in its loan portfolios should macroeconomic headwinds worsen.
Business Description
AS OF 27 Feb 2025- Security Bank is the 7th largest bank in the Philippines by total assets and was established on June 18, 1951. Security Bank’s businesses include wholesale banking, financial markets, and retail banking. The bank provides commercial banking services such as deposit products, loans and trade finance, domestic and foreign fund transfers, treasury, foreign exchange, and trust services.
- Security Bank's loan portfolio is 32% consumer & MSME, 28% middle market, and 40% corporate as of 3Q 2024.
Risk & Catalysts
AS OF 27 Feb 2025- Any rating downgrade of the Philippine sovereign would have a negative impact on Security Bank.
- Given the current rate cut environment that drives funding costs lower, Its strategy to aggressively capture market share in the retail and MSME segment might allow the bank to deliver faster growth and higher net interest income margin.
- Rapid expansion on higher yielding retail and MSME segments could worsen asset quality and increase credit costs.
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Perusahaan Listrik Negara
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