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Security Bank Corp., the seventh-largest lender in terms of assets, could see its capital strength diminish in the next one to two years due to record credit costs, global credit regulator S&P Global Ratings said on Tuesday. S&P said in a report that the bank’s performance in the third quarter was worse than expected due to its continuously high credit costs amid high rates of COVID-19 infection in the country. The bank’s provisioning costs increased to P10 billion in the third quarter from P1.1 billion a year ago. Credit costs in the first nine months multiplied to 21 billion pesos from 1.75 billion pesos in the same period last year, he said. Security Bank’s annualized credit costs rose to a hefty 600 basis points (bps) for 2020 from 91 bps in 2019, according to the debt watcher. “This level of borrowing costs is significantly higher than its industry peers, with annualized industry borrowing costs of 180 basis points for the first nine months,” said S&P.
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