Security Bank: Mild 1Q26 miss, 2026 guidance intact

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Security Bank: Mild 1Q26 miss, 2026 guidance intact

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Security Bank

Mild 1Q26 miss, 2026 guidance intact

Reiterate Rating: BUY | PO: 81.00 PHP | Price: 65.75 PHP

1Q26 net income declined 4% YoY – mild miss 14 May 2026

SECB 1Q26 net income fell 4% YoY to P2.7bn. This is slightly below our expectations Equity

(22% of FY26E) as strong NII growth and moderated opex were overshadowed by still

elevated provisions and trading losses. NII was up 28% YoY to P15.2bn, driven by a Julian Roxas ^^ Research Analyst

+30bps YoY NIMs improvement along with modest loan growth of +5% YoY. Non-II fell Philippine Equity Partners

46% YoY as steady fee income was dragged by trading losses. Opex was managed, only +63julian.roxas@pep.com.ph2 8640 6780

up 2% YoY and leading to an improved CIR of 56%. PPOP subsequently rose 24%, Jojo Gonzales ^^

though dampened by provisions (+63% YoY) that implied annualized credit cost of Research Analyst

Philippine Equity Partners

235bps. Home Credit contribution rose 91% QoQ, comprising 12% of 1Q26 profit. jojo.gonzales@pep.com.ph

Strong NIM gains, quality loan focus, NPL ratio uptick QoQ

The 30bps YoY NIM expansion was primarily driven by lower cost of funds as

Stock Datamanagement looks to optimize their funding strategy. While total deposits rose 12%

YoY, CASA grew faster up 13% YoY and led to an improved CASA ratio of 51%. Loans Price 65.75 PHP

grew 5% YoY but was down 2% QoQ. SECB remains focused on quality and guides for Price Objective 81.00 PHP

FY26E growth between 0-5%. Asset quality metrics remain stable with NPL ratio at Date Established 13-Apr-2026

3.1% (flat YoY but up 19bps QoQ) and NPL cover declining to 81% (from 86% QoQ). Investment Opinion B-1-7

SECB notes no notable delinquencies yet seen brought about by the ME conflict.