Security Bank Corporation has launched a three-year turnaround initiative designed to restore double-digit profitability and eventually secure its return to the Philippine Stock Exchange index (PSEi).
Under its new leadership, the lender intends to sharpen its focus on corporate clients, high-net-worth individuals, and entrepreneurs, while managing its retail banking efforts through joint ventures, affiliates, and subsidiaries.
Security Bank President and Chief Executive Officer Victor Lee Meng Tek stated that the bank aims to achieve a return on equity (ROE) of at least double digits by 2027, targeting 12% by 2029, up from its current ROE of approximately 8%. The bank also projects its return on assets to expand from 1% to 1.7% over the same timeframe.
”We used to be a corporate and treasury bank. Just 10 years ago, we were doing 12 to 15 percent ROE,” Lee Meng Tek said. “We are today wanting to present our turnaround plan, our plans for the next three years to get to double digit, and someday getting back ourselves to the PSE index again.”
Security Bank last hit a 10% ROE in 2017. To achieve its target, the institution plans to lower its cost-to-income ratio from 58.5% to 51% over three years, decrease credit costs from 180 basis points to around 140 basis points, and hold its common equity tier one ratio between 12.5% and 13%.
Lee Meng Tek noted that these financial metrics rely on conservative macroeconomic assumptions, providing flexibility as market conditions shift.
A key element of the strategy involves boosting investor sentiment and restoring valuation. Security Bank currently trades at roughly 0.3 times book value, a discount executives attribute to market perception rather than fundamental weaknesses.
“At a price to book of 0.3 times plus, it’s about confidence more than it is about performance,” said John David Yap, Security Bank executive vice president and chief financial officer.
“We just need to deliver consistent, boring returns. If our price to book doubles from 0.3 to 0.6, we are seeing our share price double, giving us a good chance to get back in the index.”
To support the transition, Security Bank plans to integrate artificial intelligence across customer service, operations, and financial analysis, while building on its decade-long strategic partnership with MUFG Bank Ltd. under a centralized governance structure.