Message from the Chairman
Dear Fellow Stakeholders,
In 2022, the world ushered in the third year of the pandemic with a strong economic start which was then hampered by the escalation of military conflict between Ukraine and Russia. This led to a spike in energy and commodity prices and brought about a humanitarian crisis. China’s supply chain then fell victim to the Omicron onslaught which led to additional logistical nightmares. Inflation hit many countries, one of which was the Philippines which had just welcomed a new administration. The peso fell to its lowest ever depths and food security issues continued to plague our country. Climate change remained at the global forefront as the UN COP27 was held in Egypt.
Locally, 2022 continued to be formidable for the banking sector because of the geopolitical uncertainties and their economic effects. In this difficult operating environment, improvement in our shareholder value was modest as total equity attributable to shareholders grew only by 0.62% to PHP125.85 billion at end-2022 from PHP125.07 billion at end-2021. Book value per share increased slightly to PHP166.88 from PHP165.84. Earnings per share increased from PHP9.17 to PHP14.00 while ROE strengthened from 5.57% in 2021 to 8.42% in 2022.
We also saw the share price of our Bank decline by 26.89% from PHP119.00 at end-2021 to PHP87.00 at end-2022 due to the continuing impact of the pandemic. Market capitalization likewise weakened from PHP89.671 billion to PHP65.558 billion, while price-to-book ratio deteriorated from 0.72x to 0.52x. Secure in our financial standing, we sustained dividend payouts at the same level as in the previous year, declaring a total of PHP2.26 billion for a cash dividend yield of 3.45%.
Supporting our stakeholders throughout this difficult period remained our steadfast focus throughout 2022. Indeed, recovery is essential to turn the challenges into fresh opportunities, but transformation is crucial to bridge toward a sustainable and resilient future. Our bank transformed product offerings to meet the needs of our clients and leveraged digital to bridge gaps and stay connected. Extensive investments were made on manpower and technology with increased emphasis on data management and cybersecurity. Meanwhile, our employees also continued to enjoy the benefits of the hybrid work arrangement as well as other significant human capital initiatives. All these provide the key building blocks to give our BetterBanking proposition a more meaningful impact.
The solid foundation from which we are able to deliver on our mandate with more resounding outcomes stems from our strong commitment to building a culture of integrity and good governance. Our robust risk frameworks, policies, and controls enabled the bank to uphold high governance standards in its business and operations as we responded to the dynamic operating environment. We streamlined processes and strengthened the bank’s overall policies, framework and governance especially on the program management side to support the smooth running of business operations which adhere to regulatory requirements. From a board perspective, with the creation of the Operational Risk Management Committee, the Board of Directors was able to have adequate oversight and provided strategic direction over operational risk issues such as cybersecurity and fraud. The Board also recognized tenets of sustainability, especially climate change, as one of the more critical concerns that impact food security now and into the future and as such, approved the enhancements to the sustainable finance framework. And as a testament to being best in class in corporate governance among local publicly listed companies, the Bank was awarded three Golden Arrows and received the ASEAN Asset Class Award for the first time from the Institute of Corporate Directors.
While there is no clear view on the probable timeline for the headwinds to reverse, we remain committed to fulfilling our BetterBanking promise to provide products and services that build people, businesses and the nation, and remain optimistic and confident in our ability to manage what lies ahead. We continue to invest in people and technology transformation to strengthen our value proposition of being the most customer-centric bank. With our strategic initiatives, we are well poised to capitalize on recovery opportunities that arise amidst the uncertainty. We also take our first step into Integrated Reporting this year which allows us to better articulate how the Bank generates value and creates impact for all stakeholders. This will be a progressive journey, and we hope it will provide a clearer and more transparent account of how the strategies we execute deliver value.
Our achievements during these challenging times could only have been accomplished by the continued strong and sturdy support of many. My appreciation goes to my fellow Directors and Advisors as well as our Senior Management who provided a clear vision and effective leadership in steering the bank through an arduous path. A special thanks goes to all Security Bankers for their commitment and professionalism in serving the bank and its stakeholders and delivering results despite the adversities faced. We also recognize our clients, business partners, and shareholders for their unceasing trust and confidence in Security Bank. We are grateful for your continued support and look forward to having a meaningful impact on your lives this 2023.
To God be the glory, great things He has done!
Alberto S. Villarosa
Chairman
2022 Integrated Report
Toward meaningful impact
