leading banking into the future - security bank … senior vice presidents 56 first vice presidents...

Leading Banking into the Future

Security Bank Corporation 2015 Annual Financial and Sustainability Report

1 Corporate Profile4 2015 Snapshots 6 Message from the Chairman Emeritus 8 Message from the Chairman 10 Message from the President & Chief Executive Officer 12 Review of Operations 20 Performance Summary from the Chief Financial Officer 24 Awards and Distinctions 26 Board of Directors28 Board of Directors’ Profile32 Corporate Governance36 Executive Committee37 Risk Management41 Compliance

44 Audit Committee Report45 Statement of Management Responsibility for Consolidated Financial Statements46 Independent Auditors’ Report 47 Statements of Financial Position48 Statements of Income49 Statements of Comprehensive Income50 Statements of Changes in Equity52 Statements of Cash Flow54 Executive Management55 Senior Vice Presidents56 First Vice Presidents

TABLE OF CONTENTS

57 Subsidiaries Management58 Sustainability Report: Building the Business Building the Nation60 BetterBanking is Sustainable Banking63 Economic and Environmental Sustainability66 Social Sustainability 70 Corporate Social Responsibility74 The BetterBanking Experience75 GRI G4 Content Index80 Products and Services81 Branch Directory92 Contact Us

ABOUT THE COVER

Security Bank Corporation is one of the Philippines’ leading universal banks, established on June

18, 1951 as the first private, Filipino-controlled bank of the post-World War II period. It was

publicly listed at the Philippine Stock Exchange (PSE: SECB) in 1995.

Security Bank’s major businesses cover retail banking, wholesale banking and financial markets,

offering a wide range of services including deposits, loans, financing, leasing, foreign exchange,

stock brokerage, investment banking and asset management.

In 2015, Security Bank continued its rebranding campaign focusing on the retail banking business,

anchored on providing priority service and superior customer experience in line with the brand

promise of BetterBanking.

Security Bank has received numerous awards and recognition from international and local

organizations for product innovation, market leadership and best-of-class management practices,

including the prestigious 2015 Bank of the Year – Philippines given by The Banker.

Security Bank goes beyond success in business through various educational and livelihood activities,

environmental and other sustainable programs as part of its corporate social responsibility

through Security Bank Foundation, Inc. (SBFI), promoting deeper engagement among employees

and encouraging active involvement in helping create positive changes in the communities where

the Bank serves.

Member: Bancnet, Philippine Deposit Insurance Corporation (PDIC), Bankers Association of the Philippines (BAP), Bankers Institute of the Philippines (BAIPHIL), Institute of Corporate Directors (ICD), Shareholders’ Association of the Philippines (SharePHIL), Financial Executives of the Philippines (FINEX), Management Association of the Philippines (MAP), People Management Association of the Philippines (PMAP), Bank Marketing Association of the Philippines (BMAP), Philippine Association of National Advertisers (PANA), International Association of Business Communicators (IABC), Money Market Association of the Philippines (MART), Trust Officers Association of the Philippines (TOAP), Fund Managers Association of the Philippines (FMAP), Credit Card Association of the Philippines (CCAP) and Investment House Association of the Philippines (IHAP). (G4-16)

CORPORATE PROFILE (G4-3, G4-4, G4-8)

Millennials are today’s dominant generation. They are well-travelled, idealistic over-achievers. Security Bank understands their needs and starts them early with financial services and money management habits that fit their evolving requirements. We offer a new way of banking for this generation to match their passion for life. The BetterBanking experience for millennials means better mobile apps and digital platforms so that they can live, work and play without missing a beat.

1 2 0 1 5 A n n u a l R e p o r t 2 0 1 5 A n n u a l R e p o r t

WE VALUE

TO BEA world-class bank that is the best of the best, a lifetime partner in fulfilling dreams across generations, beyond borders.

• Integrity • Excellence • Professionalism • Teamwork • Customer Focus • Sense of Ownership• Continuous Improvement

(G4-56)

2 0 1 5 A n n u a l R e p o r t 3 2 0 1 5 A n n u a l R e p o r t

2015 SNAPSHOTS

Megan Young look-alikes rally for banking convenience in the Mall Picket Line promo event.

The Force is strong in Chairman Abet Villarosa during his speech in “The Battle to Greatness” BBG Sales Rally.

Luis Antonio Cardinal Tagle, Archbishop of Manila, starts the year with a Thanksgiving Mass.

Customers enjoy the Moon Fest dice games in the Mid-Autumn Festival and appreciation dinner.

4 S e c u r i t y B a n k C o r p o r a t i o n

President Yogi Salcedo at the ‘Oscars of the global banking industry’ in London to accept the Bank of the Year award from The Banker.

Four presidents: past and current, at the Customer Appreciation Party. From left: Peter Favila, Abet Villarosa, Yogi Salcedo and Babes Simpao with Chairman Emeritus Frederick Dy at the center.

Megan Young arrives at the Hunger Games-inspired Christmas Party for a “Fearless Conquest” with Security Bankers.

Security Bankers prep for the “Big One” in the Metro Manila-wide BEEP Earthquake Drill.

5 2 0 1 5 A n n u a l R e p o r t

“These organizational changes emphasize our focus on ensuring the continuity of the Bank’s strategy and execution, and our commitment to good governance and professionalism. In my new role as Chairman Emeritus, I am dedicated to taking care of the Security Bank family. ”

Dear Stakeholders, (G4-1)

THE CHAIRMAN EMERITUS

Message from

In 2015, Security Bank achieved record profits, strong

growth in assets and numerous awards validating the Bank’s

outstanding achievements. I am pleased to report that the

global giant Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU) will be

investing a 20% stake in Security Bank Corporation in 2016.

We look forward to bringing Security Bank to the highest

levels of banking performance with BTMU as our strategic and

long-term partner.

The year 2015 was also when, after serving as your Chairman

for 25 years, I was elected Chairman Emeritus. In my place,

Mr. Alberto Villarosa was elected Chairman after having served

as President and CEO for 11 years. Mr. Alfonso Salcedo, Jr.

was appointed as our new President and CEO.

The Dy family remains absolutely committed as the majority

shareholder of Security Bank to work tirelessly to make

Security Bank the best bank in the Philippines.

These organizational changes emphasize our focus on ensuring

the continuity of the Bank’s strategy and execution, and our

commitment to good governance and professionalism.

I would like to express my heartfelt appreciation for

Mr. Abet Villarosa’s leadership which has brought Security Bank

to a very strong industry position. Over the span of more

than 11 years with Mr. Villarosa at the helm, the Bank has

grown more than five times in capitalization, over 14 times

in terms of net income and almost six times in total assets.

Thank you very much, Abet, for your excellent stewardship!

I also take this opportunity to welcome Mr. Yogi Salcedo to the

Security Bank family. Given his experience and expertise, his

appointment as President and CEO reinforces our long-term

strategy of growing our retail bank as a third business pillar,


FREDERICK Y. DYChairman Emeritus

while maintaining our strength in the wholesale banking and

financial markets businesses.

Security Bank remains committed to its vision to be a world-

class bank that is the best of the best, a lifetime partner in

fulfilling dreams across generations, beyond borders.

As the only independent bank among the top private domestic

universal banks, we seek to be the most trusted and lifetime

bank of our clients. After all, banking is Security Bank’s only

business.

We continue to deliver superior shareholder value. We look

beyond where we are now and prepare to operate in an

integrated ASEAN market. To blossom, we will continue to

recruit, nurture and develop the best people. In my new role,

I am dedicated to taking care of the Security Bank family.

We continue to do all these in a spirit of gratitude towards our

customers, partners, shareholders, the Board of Directors and

all Security Bankers.

Above all, we acknowledge our Lord God Almighty and

express our thanksgiving for the countless blessings He has

bestowed on Security Bank and all Security Bankers.

7 2 0 1 5 A n n u a l R e p o r t

I am pleased to note that in 2015, Security Bank sustained its

leadership in shareholder returns. Stakeholder value remains

as the core focus of our strategy.

To ensure the sustainability of our earnings, we continue

to seek a balance in the contributions of our three business

segments. Even as we focus on our core strengths in

Wholesale Banking and Financial Markets, we also grow

our third pillar of Retail Banking to become a well-balanced

financial institution. We operate along our core disciplines

of profitability, cost efficiency, asset quality, capital strength

and governance, while we concentrate on our chosen target

markets. We stay committed to our BetterBanking promise

to deliver superior customer experience to these markets.

This has become our new norm for providing personalized

banking to our clients.

Our Wholesale Banking business is strategically positioned to

support growth in the country’s infrastructure, wholesale and

retail trade, power, manufacturing and other vital sectors

of the economy. Our Financial Markets business continues

“We stay committed to our BetterBanking promise to deliver superior customer experience to our markets. This has become our new norm for providing personalized banking to our clients.”

to be a leader in meeting the growing demand for innovative

investment, hedging and financial solutions products.

Our Retail Banking business is poised to service the requirement

of the country’s emerging affluent and growing middle class.

Over the years, shareholder value has grown significantly. From

2006 to 2015 (except for 2013), your Bank has been the industry

leader in terms of Return on Equity. Over the last decade,

our market capitalization has experienced a 7.5 times increase

to P85.6 billion, equivalent to 22% compounded annual growth.

Earnings per share have also grown by 3.6 times to P12.76

or 14% annually over the same period. Capital has likewise

increased by a 10-year CAGR of 18% to P53.2 billion. Book

value per share over the same period has grown almost three

times from P31.10 to P88.17 while our price-to-book ratio has

improved from 1.11 times at end-2005 to 1.61 times at

end-2015. Meanwhile, annual cash dividends have increased by

3.7 times over the same 10-year period to P1.2 billion.

This growth happened because of our aggressive business

initiatives complemented by the robust risk management

Dear Stakeholders,

THE CHAIRMANMessage from


embedded in our DNA which has shielded us from risks

during transitions in operating environments here and

abroad, as well as from regional contagion effects.

We will continue to be prudent in our lending and investment

decisions.

As I take on my new role as Chairman of your Bank,

we reiterate our commitment to good governance and

professionalism. We also emphasize the continuity in the

Bank’s strategy as the new President and CEO,

Mr. Alfonso Salcedo, Jr., takes over the reins of leadership.

A veteran banker, he brings with him a depth and breadth

of experience and a vision for the Retail Banking business

that we need. Together with his experience in the Wholesale

Banking business, I am certain he will bring Security Bank to

the next level.

It would be appropriate to mention that The Bank of Tokyo-

Mitsubishi UFJ, Ltd. (BTMU), the largest bank in Japan,

has recognized Security Bank’s strength and has decided

to become a strategic partner to help the Bank achieve

accelerated growth through capital infusion and business

collaboration. BTMU will be investing P36.9 billion in

Security Bank in 2016 and taking on a 20% stake.

In closing, we highlight our commitment to continue

creating value for our customers, markets and shareholders

by fulfilling our BetterBanking promise to provide products

and services that build people, businesses and the nation.

Congratulations to the Security Bank team for the

outstanding performance. We thank our customers,

partners, the Board of Directors and all Security Bankers for

another excellent year. All these have been possible only

through the grace of our Lord God Almighty.

ALBERTO S. VILLAROSAChairman

9 2 0 1 5 A n n u a l R e p o r t

The Philippine economy grew by 5.8% in 2015, outperforming most of its Asian neighbors. The Philippines proved to be resilient to the external challenges of the slowdown in China and volatility in global financial markets. Household spending powered by earnings from business process outsourcing and remittances, fixed investments and public spending were the main drivers of economic growth.

For Security Bank, 2015 was a very good year. We made significant progress in growing our core revenues as a counterbalance to declining trading gains. The Bank continued to execute its strategy of building the Retail Banking business to complement its strengths in Wholesale Banking and Financial Markets.

In 2015, Security Bank achieved an all-time high net income of P7.7 billion, 7% higher than previous year, which translated to an industry-leading ROE of 15.2%.

Loans increased by 24% to P240 billion while deposits grew by 17% to P290 billion. Loan growth was driven by wholesale loans which expanded by 20% and consumer loans which increased by 68%. Total assets grew by 34% to P532 billion.

Even as the loan book expanded, asset quality remained healthy with net Non-Performing Loans (NPL) ratio at 0.14%, lower than 2014 NPL ratio of 0.28% and among the lowest in the industry. NPL cover increased to 205% from 200% at end-2014, among the highest in the industry.

Net interest income increased by 11% to P12.4 billion, with net interest margin (NIM) at 3.3%. Total non-interest income was P5.9 billion, 9% higher than previous year, led by a 37% increase in fee-based income. The Bank earned P2.1 billion in gain on the sale of securities, lower than the P3.1 billion posted in 2014. Core revenues – comprising net interest income, fee-based income and trading gains attributable to customer flows – grew by 15% to P15.5 billion.

Cost-to-income ratio remained low at 50%. Operating expenses (excluding provisions) grew by 19% due to continuing investments in the Retail Bank and in delivering the BetterBanking promise to customers. New innovative products launched in 2015 included the Security Bank MasterCard Complete Cashback credit card, the All Access Account and the complete line of Bancassurance offerings.

“For Security Bank, 2015 was a very good year. The Bank continued to execute its strategy of building the Retail Banking business to complement its strengths in Wholesale Banking and Financial Markets.”

THE PRESIDENT AND CHIEF EXECUTIVE OFFICER

Message from

Dear Stakeholders,


These strong results were recognized by respected local and international award-giving bodies. Among the most noteworthy was the 2015 Bank of the Year- Philippines, a title first received by Security Bank in 2012. Considered the “Oscar awards of the global banking community,” it is given by the world’s leading financial publication, The Banker magazine.

We also spent the year developing our people. We invested heavily in training as we cascaded the BetterBanking experience training program to all Security Bankers. We enhanced our recruitment and talent retention through programs designed to upgrade our employees’ technical, sales, customer service, behavioral and leadership skills.

We continued to do our part in nation-building through our Corporate Social Responsibility projects. With the various educational and livelihood activities, environmental and other sustainable programs offered by Security Bank Foundation, Inc., we created opportunities to give back not only to the communities where we are present but also to the nation as a whole. From 2011 to 2015, the Foundation funded the construction of 241

classrooms and turned over 199 completed classrooms to 55 public schools in 31 cities and municipalities nationwide.

At the beginning of 2016, our outstanding track record was further validated by the decision of The Bank of Tokyo-Mitsubishi UFJ, Ltd., Japan’s largest bank, to become our strategic partner. This transaction will provide us with capital, long-term funding and business collaboration opportunities that will support the acceleration of our growth strategy.

I would like to thank our customers, our business partners, the Board of Directors and Team Security Bank for an excellent year. Through the grace of God, I look forward to many more enjoyable and challenging years in Security Bank.

In our journey towards BetterBanking, be assured that the best is yet to come.

THE PRESIDENT AND CHIEF EXECUTIVE OFFICER

ALFONSO L. SALCEDO, JR.President and CEO

11 2 0 1 5 A n n u a l R e p o r t

REVIEW OF OPERATIONS (G4- PR 3)


The year 2015 was a year of growth for the retail business. Major growth was seen particularly in mortgage banking whose loan portfolio jumped by 87%. Total retail loan portfolio growth was at 68%. Retail deposits also expanded significantly with a year-on-year growth of 27%.

Driving this expansion was the substantial increase in the number of retail clients which grew by more than 123 thousand individual customers. Many of these new clients were welcomed through the launch of new, innovative products during the year.

The new All Access, a checking account that comes with a passbook, checkbook and Everyday Debit/ATM MasterCard, was offered to existing and new clients in 2015 to provide them with a deposit account that does almost everything they needed. This generated much interest and numerous new accounts in the last quarter of the year.

Strategy Statement

Growing the Retail Bank through BetterBanking

Security Bank seeks to be a large independent bank supporting the growth of key sectors of the economy.

Security Bank shall continue to enhance shareholder value and to maintain the highest ROE among the top 10 private domestic universal banks in the country.

Security Bank shall continue to build its Retail Bank business as a third business pillar alongside Wholesale Banking and Financial Markets.

Security Bank shall significantly grow its deposit and loan market shares.

Security Bank shall accelerate its growth and coverage of attractive and profitable niche markets, focusing on its core revenues.

Mortgage Loan Portfolio

Retail Loan Portfolio

INCREASE

Retail Deposit

INCREASE87% 68% 27%

INCREASE INCREASE

Presidentand CEO

Financial MarketsSegment

Wholesale BankingSegment

Retail BankingSegment

Treasury Group Operations and Support

Organizational Chart

“It is our belief that our achievements are a direct result of our fulfilment of the BetterBanking promise. Simply put, BetterBanking is a more personalized, professional, problem-free and prompt delivery of the banking experience to our customers.” —ALFONSO L. SALCEDO, JR., President and CEO

Meeting the Evolving Banking Needs of Millennials

2 0 1 5 A n n u a l R e p o r t 17

REVIEW OF OPERATIONS

(Asian Banking and Finance Retail Awards 2015) and the Best Branch Innovation Initiative in the Philippines (The Asian Banker Excellence in Retail Financial Services Awards 2015).

In 2015, the Retail Bank launched the International Student Identity Card (ISIC) Debit MasterCard, an ID, ATM Debit and privilege card all in one for students. The new mobile banking app and online applications were also launched in order to expand Security Bank’s coverage and distribution. Through e-Commerce and greater visibility in social media, the Bank hopes to create awareness that will lead to better financial education and financial inclusion of the next generation.

S e c u r i t y B a n k C o r p o r a t i o n13

We know you best...

The Complete CashBack Credit Card was also launched in 2015 as the first and only card that offered 5-tiered rebates for groceries (5%), gasoline (4%), utilities (3%), dining (2%) and shopping (1%). This was well received by retail clients.

The Bancassurance business proved to be the biggest surprise of 2015. With the offering of a complete line of life insurance products from FWD Life Insurance Corporation, the Bancassurance business dramatically exceeded the Annualized Premium Equivalent target by 233%.

Several mandates for payroll and corporate employee loans were likewise obtained during the year, leveraging on the solid corporate relationships of the Bank.

Much of 2015 was spent working on service quality and building towards our customer value proposition of BetterBanking. Through an annual customer satisfaction survey, queuing data, mystery shopping programs and the voice of the customer, the Retail Bank had been able to set the baseline in 2015 and good results have been seen so far. The BetterBanking Experience training program had also been fully rolled out to all customer-facing employees, as well as to those who provide middle- and back-office support.

Award-giving bodies recognized the tremendous growth in the Retail Banking business of Security Bank. The Bank was honoured for the Best Brand Program (Bank Marketing Awards 2015), the Philippines’ Advertising Campaign of the Year

Complete Cashback card for fuel, groceries and other essentials



Speed test a new ride Travel to new places

We know you best...

We understand your needs...

Try bankable mobile apps

Security Bank’s service promise of BetterBanking is based on the belief that the bank that knows its customers best, puts them first. By understanding the clients’ needs, Security Bank can offer them products and services suited to their requirements. No matter what lifestage a retail customer is in, regardless of how big or small a company is, Security Bank is there for them.

2 0 1 5 A n n u a l R e p o r t 15

Travel to new places Be on fleek with your lifestyle Work beyond borders

Nation-building with Wholesale BetterBankingCorporate Banking Group (Corbank)

Corbank continued to support nation-building by funding infrastructure projects crucial to economic development. Among Corbank’s major clients in 2015 was Davao International Container Terminal, Inc. (DICT) whose construction of the second berth in its new Davao port facility and an Empty Container

Depot, and installation of a 69KV power substation were financed by SBC. DICT plays a critical role in the movement of goods into and from the bustling Davao region.

Another Corbank client in 2015 was Laguna AAA Water Company for which SBC financed a bilateral term loan for the expansion of water supply coverage to 6 cities and 23 municipalities in the entire province of Laguna. This project falls under the Public Private Partnership (PPP) program of the National Government.

SBC also participated in Hedcor Bukidnon, Inc.’s P10.0B Corporate Notes Facility to finance the Aboitiz Group’s 68.8MW run-of-river hydropower plant in Manolo Fortich, Bukidnon. This project will cater to the growing power demand in Mindanao and is part of the group’s continuing drive to develop environment friendly power sources.

Banking Centers Group

The Banking Centers Group did its fair share in nation-building by supporting several middle-market clients. SBC was one of the Joint Lead underwriters for the Bond Offering of the 8990 Group of Companies. SBC was also one of the Joint Lead underwriters for the follow on offering of Cirtek Holdings. For Transcom Worldwide Philippines, SBC provided Cash Management Products, ATMs and a Commercial Credit Line Facility.

In 2015, SBC financed the project showroom and Service Center of Toyota Alabang, Inc., and provided them Cash Management

2 0 1 5 A n n u a l R e p o r t 16

We put you first...

Bundled perks with Business Plus corporate card

Chef Jessie Sincioco, a loyal Security Bank customer,defines the new breed of creative entrepreneurs.


and Consumer Financing. SBC likewise supported the Laus Group for the new Ford Everest launched in 2015.

SBC helped finance the Meat Processing Plant of RDF Feed, Livestock & Foods, Inc. in Porac, Pampanga. The new Plant was inaugurated in October 2015, highlighting SBC’s increasing presence in the countryside to support local businesses.

In addition, SBC financed a 26-storey office building project of Portuguese Realty which will house a foreign bank’s regional operating headquarters and business process solutions.

Transaction Banking Group (TBG)

In 2015, TBG launched the Philhealth EPRS facility. SBC was the first Authorized Agent Bank (AAB) to offer this facility with Philhealth, as a preferred AAB of choice of government agencies for electronic collection solutions.

Manila Water and Maynilad signed up with SBC’s Bills Payment facilities in 2015, bringing additional convenience to the bills payment options of the Bank’s clients and partners.

SBC bagged the Asset Asian Awards’ “Best eSolutions Partner Bank for the Philippines”. This was the third consecutive year that SBC received the award for the DigiBanker facility. In addition, SBC was awarded Top IBFT Issuer in July 2015 during Bancnet’s 25th Anniversary for generating the highest volume of IBFT transactions from 2010 to 2014.

SB Capital

The year 2015 saw several landmark deals for SB Capital. SB Capital acted as Co-Lead Arranger for Therma Visayas, Inc.’s (TVI) P31.97 billion project finance loan facility which was successfully closed in June 2015, the proceeds of which will be used to partially finance the construction and development of a 300 MW coal-fired power plant in Toledo City, Cebu.

SB Capital was also Joint Lead Arranger for the P10.0 billion privately placed corporate notes issue of Hedcor Bukidnon, Inc. (HBI), a wholly-owned subsidiary of Aboitiz Renewables, Inc. (ARI). Net proceeds from the facility will be used to partly finance the development and construction of HBI’s proposed 68.8 MW Manolo Fortich 1 and 2 run-of-river hydropower plant project located in Manolo Fortich, Bukidnon. The transaction was adjudged as the

“Best Renewable Finance Deal of the Year in Southeast Asia” by the Alpha Southeast Asia Awards Magazine during its 9th Annual Best Deal and Solution Awards 2015 held in Kuala Lumpur, Malaysia in February 2016.

SB Capital was likewise appointed as Joint Issue Manager, Joint Lead Underwriter and Joint Bookrunner for San Miguel Corporation’s Series 2 perpetual preferred shares issue, which was approximately five times oversubscribed in view of the brisk demand from both retail and institutional investors. The transaction was the largest preferred shares issuance of 2015 which aimed to partially fund the redemption of the P54.075 billion subseries 2-A preferred shares issued by San Miguel Corporation back in September 2012.

In September 2015, SB Capital earned recognition as the Best Bond House in the 9th Annual Best Financial Institutions and 5th Annual Corporate Awards 2015 by Alpha Southeast Asia, one of the top and reputable financial and investment magazines in the Asian region. SB Capital was also accorded the Honorable Mention award for Equity Capital Markets Bank by Finance Asia, one of the leading publications in Asia which covers developments on financial and capital markets.

SB Equities

SB Equities remained as the Number 1 broker among the bank-owned brokerage houses in 2015, top 11 among the 133 active brokerage houses. In 2015, SB Equities started offering real-time electronic executions to its domestic and foreign institutional customers. SB Equities also dramatically increased its order-taking capacity with the upgrade of its front-end Order Management System.


SBM Leasing (SBML)

SBML strengthened its business relationships with its clients in 2015. SBML granted Delta Earthmoving, Inc. (a Luzon-based mining contractor) a financing facility to support their gold mining operations in Didipio, Nueva Vizcaya under Oceana Gold Philippines Inc. SBML also partnered with M. Montesclaros, Inc., a Bukidnon-based contractor in the major infrastructure projects in Mindanao by providing lease facilities for their purchase of various types of transport and heavy equipment. Anseca Development Corp., a long time contractor of Holcim Phils., Inc. and a client of SBML since April 2012, acquired additional heavy equipment through SBML.

SB Rental

SBC’s newest subsidiary, SB Rental, achieved its highest booking volume in November 2015. SB Rental had been actively acquiring new clients during the year for operating leases of vehicles, gensets and various kinds of equipment (i.e. kitchen, bakery, communications, IT and medical equipment).

Treasury: BetterBanking with Offshore USD NoteIn 2015, the Treasury Group continued to perform its usual functions of asset and liability management, fixed income, FX and derivatives trading, hedging and distribution, but the highlight of the year was the issuance of Security Bank’s offshore USD bond amounting to $300 million listed in the Singapore Stock Exchange.

The total order book for the issuance reached $1,768 million, almost six times oversubscribed. In terms of actual distribution, around 58% was allocated to the Philippines, 35% to the rest of Asia and 7% to Europe and the U.S. The average duration of the Bank’s funding increased after the issuance.

Asset Management: Seeking Clients’ Financial WellnessIt was a tough year for the Asset Management Group (AMG). The stock market was volatile and mostly down, bond performance was challenging, and getting consistent returns for clients was difficult. Despite that, the Asset Management Group continued its work and designed new endeavours to provide value to customers.

In response to the trying times and as a service to the nation, financial wellness seminars were offered to clients and prospective clients. Every week from September to November 2015, in various locations (Makati, Ortigas, Cebu, Davao), these seminars generated strong interest, indicating the need of Filipinos for financial education.

AMG also spent the year building up the group in terms of human and technological resources. The Group was able to establish its full complement for its professional investments and sales teams. AMG focused on its fund management of UITFs, retirement funds and corporate investment management accounts (IMAs). It also launched its new SB Philippine Equity Index Fund for investors with aggressive risk appetite and those seeking returns that mirror the Philippine Stock Exchange Index (PSEi).

19 2 0 1 5 A n n u a l R e p o r t

Source: http://www.sgx.com/wps/portal/sgxweb/home/company_disclosure/company_announcements

THE CHAIRMAN EMERITUS

I am pleased to report that 2015 was another record-breaking

year for Security Bank. Our asset size reached an all-time high

of P532.2 billion while our record-setting net income of P7.7

billion represented a 7.5% increase over 2014 and translated to

an industry-high 15.2% return on equity (ROE).

This solid performance was achieved on the back of a 23.8%

loan portfolio growth, which compensated for the margin

squeeze as net interest margin declined to 3.27% from 3.37%

in 2014. Net interest income for the year was P12.4 billion,

up 11.3% from 2014. As expected, securities trading gain of

P2.9 billion declined by 20.2% from the previous year. This

decline, however, was compensated by a 64.4% increase in

other income from FX, bancassurance, corporate finance deals,

equities brokerage, real estate, leasing and equity trading

totalling to P3.0 billion. All these combined to raise total

operating income to P18.3 billion, 10.4% higher than the

prior year.

In line with business expansion, operating expenses (excluding

provisions for credit and impairment losses) grew to P9.4 billion,

19.4% higher than in 2014. Significant investments were

made in the branch network, IT infrastructure, marketing and

other improvements especially in the Retail Bank to enhance

the BetterBanking experience of customers. With these

investments, cost-to-income ratio increased to 50.3% from

47.3% in the previous year, but still remained among the best

in the industry.

The Bank’s balance sheet continued to be robust with superior

asset quality. Net non-performing loans (NPL) ratio improved

further to 0.14%, about half of end-2014’s 0.28%. NPL cover

remained among the highest in the industry at 205%.

Total deposits grew by P42.7 billion to P289.5 billion, a higher-

than-industry growth of 17.3% from end-2014 level. Our

funding level and funding average duration was also improved

by the issuance of our USD300 million note in February 2015.

The capital base of Security Bank strengthened to P53.2 billion

by the end of 2015, net of minority interests in consolidated

subsidiaries. This was an increase of P6.3 billion or 13.5%

from P46.9 billion at the end of 2014. A total of P2.00

of regular and special cash dividends per share were declared

in 2015 at a dividend yield of 1.41% based on closing share

price at end-2015.

“Given our superior profitability, outstanding asset quality, strong capital base to be fortified by a substantial capital infusion, and game-changing partnership with a global bank, Security Bank is ready to move on to the next stage of its growth and development.”

THE CHIEF FINANCIAL OFFICER

Financial Performance Summary from


Capital Adequacy Ratio (CAR) at15.20% and CET1 Ratio at

12.19% are well above the minimum requirements set by the

Bangko Sentral ng Pilipinas (BSP). With the expected fresh

capital of P36.9 billion from The Bank of Tokyo-Mitsubishi UFJ

Ltd. (BTMU) in 2016, CAR is projected to rise to 24.31%.

This will provide Security Bank with long-term funding and

ample room for accelerated growth.

Given our superior profitability, outstanding asset quality, strong

capital base to be fortified by a substantial capital infusion, and

the game-changing partnership with a global bank, Security

Bank is ready to move on to the next stage of its growth and

development. The Bank is poised to expand its distribution and

coverage even further, maximize opportunities that will present

themselves in 2016, and significantly increase its contribution to

nation-building.

JOSELITO E. MAPEChief Financial Officer

Asset size reached an all-time high of

represented a 7.5% increase over 2014

P532.2

P7.7

billion

billion

Net Income After Tax of

21 2 0 1 5 A n n u a l R e p o r t

For the Year (in Php Million) 2015 2014 2013

Net Income 7,699 7,164 5,012

Net Interest Income 12,399 11,141 8,368

Non-Interest Income 5,910 5,446 3,774

Total Operating Income 18,309 16,588 12,142

Operating Expense (excl. credit & impairment losses) 9,388 7,865 6,700

Total Assets 532,201 397,198 347,542

Loans and Receivables (Net) 240,187 194,004 165,242

Total Deposits 289,526 246,813 205,950

Total Capital 53,210 46,881 40,756

Market Capitalization 85,602 91,630 69,687

Return on Shareholders’ Equity 15.17% 16.32% 12.87%

Return on Assets 1.73% 1.91% 1.82%

Net Interest Margin 3.27% 3.37% 3.49%

Net Non-Performing Loans Ratio 0.14% 0.28% 0.11%

Total Assets

532,201397,198

347,542

Loans and Receivables (Net)

240,187194,004

165,242

Total Deposits

289,526246,813

205,950

Total Capital

53,21046,881

40,756

Net Income

7,6997,164

5,012

2013 2014 2015

FINANCIAL HIGHLIGHTS


BRANCHES

ATM network

555

262

Metro Manila

160

Visayas21

Luzon59

Mindanao22

Branch Network

262

Numberof Employees

4,328

Return on Assets

1.73%Return on Shareholders' Equity

15.17%Net Income

billionP7.7

Total Assets

billion532.2Market Capitalization

billionP85.6Total CAR

15.20%

Tier 1 CAR

12.19%

Capital Adequacy Ratios

Net NPL Ratio

0.14%NPL Cover

204.68%

Asset Quality Ratios

Investment Merits 2015

23 2 0 1 5 A n n u a l R e p o r t

AWARDS AND DISTINCTIONS

RETAIL BANKER

Best Bancassurance Asia Trailblazer Awards 2016

RETAIL BANKER


RETAIL BANKER


We continue to uphold a tradition of banking excellence. These distinctions speak of our passion to fulfill our promise of BetterBanking.

INSTITUTIONAL AWARDS WHOLESALE BANKING RETAIL BANKING

TREASURY

BEST CEO FOR INVESTOR RELATIONS (then President & CEO and now

Chairman Alberto Villarosa)

BEST INVESTOR RELATIONS COMPANY (Philippines)

BEST CORPORATE SOCIAL RESPONSIBILITY

ICON ON CORPORATE GOVERNANCE (2010 to 2015)

ASIAN CORPORATE DIRECTOR OF THE YEAR for Security Bank Chairman Alberto Villarosa

BEST FOR OVERALL CORPORATE GOVERNANCE in the Philippines

BEST FOR INVESTOR RELATIONS in the Philippines

BEST FOR RESPONSIBILITIES OF MANAGEMENT AND THE BOARD OF DIRECTORS

in the Philippines

NO. 3 BEST FOR DISCLOSURE AND TRANSPARENCY in the Philippines

HIGHLY COMMENDED –BEST BANCASSURANCE

BEST FOREX BANK PHILIPPINES

OVERALL BEST FOR INTEREST RATE in the Philippines

BEST FOR INTEREST RATE DERIVATIVES in the Philippines

PHILIPPINES’ DOMESTIC FOREIGN EXCHANGE BANK OF THE YEAR

OVERALL BEST MANAGED COMPANY in the Philippines (Mid-Cap Category)

BEST SMALL CAP EQUITY DEAL OF THE YEAR

in Southeast Asia Xurpas

8th Annual Best Deal & Solution Awards SB Capital Investment Corporation

BEST PROJECT FINANCE DEALPagbilao Energy Corporation

8th Annual Best Deal & Solution Awards SB Capital Investment Corporation

BEST BOND HOUSE9th Annual Best Financial Institutions &

5th Annual Corporate AwardsSB Capital Investment Corporation

ASIA-PACIFIC RENEWABLES DEAL OF THE YEAREDC Burgos Wind Power Corporation

Security Bank Corporation, SB Capital Investment Corporation

BURGOS WIND FARM PROJECT Security Bank Corporation

SB Capital Investment Corporation

PHILIPPINES, BANK OF THE YEAR for 2nd Consecutive Year

BEST BRAND PROGRAM Bank Marketing Awards 2015

PHILIPPINES’ ADVERTISING CAMPAIGN OF THE YEAR

BANK OF THE YEAR PHILIPPINES

ONE OF THE BEST MID-CAP COMPANIES in the Philippines

BANK OF THE YEAR – PHILIPPINES

BEST BRANCH INNOVATION INITIATIVE in the Philippines

BEST IMPROVED RETAIL BANK (APAC)Excellence in Retail Financial Services Awards

MANAGEMENT EXCELLENCE

DigiBanker - BEST E-SOLUTIONS PARTNER BANK in the PhilippinesBest Electronic Bank, Philippines

ASIA’S LEADER IN MERCHANT PARTNERSHIPS for Sweep Card

BEST INTER-BANK FUND TRANSFER ISSUER Security DigiBanker

BancNet’s 25th Anniversary Awards

TRANSACTION BANKING

BEST POWER DEALPagbilao Energy Corporation


Security Bank remains focused on delivering our promiseof BetterBanking. This most recent award simply confirms

that we’re doing it right.… and that encourages us to work even harder.

Security Bank regains the title it first won in 2012

as 2015 Bank of the Year – Philippines by The Banker. Regarded as the “Oscars of the global

banking industry,” it is the world’s longest running

international banking title. Only one bank is selected

from each country – based on overall banking excellence,

strong management, sound business model and

prudent risk management approach.

Recognized for the second time!

Founded by Brendan Bracken in 1927, The Banker Magazine is the international banking and finance magazine of the Financial Times Ltd. For over 9 decades, The Banker has been the leading journal for the world’s banking industry.

25 2 0 1 5 A n n u a l R e p o r t

From left to right:

Jose R. Facundo, Paul Y. Ung, Philip T. Ang,

Rafael F. Simpao, Jr., Joseph R. Higdon and Frederick Y. Dy

BOARD OF DIRECTORS


From left to right:

Alberto S. Villarosa, Diana P. Aguilar, Alfonso L. Salcedo, Jr.,

James J.K. Hung, Anastasia Y. Dy and Joel Raymond R. Ayson

(Corporate Secretary)

27 2 0 1 5 A n n u a l R e p o r t

BOARD OF DIRECTORS’ PROFILE (G4-LA12)

ALBERTO S. VILLAROSAChairman

FREDERICK Y. DY Chairman Emeritus

FREDERICK Y. DY, 61, was elected Chairman Emeritus on April 28, 2015. He was elected Vice Chairman of the Board on April 4, 1989 before assuming the Chairman’s position from April 1991 to April 2015. He is an alternate member of the Bank’s Executive Committee. He is the Chairman of St. Luke’s Medical Center (since August 2011), Chairman of City Industrial Corporation (since June 1994), Independent Director of PLC- Nickel Asia Corporation (since September 2010) and a Director of Ponderosa Leather Goods Co., Inc. (since May 1980).

ALBERTO S. VILLAROSA, 65, was elected as Chairman of the Board on April 28, 2015. He was elected to the Board in October 2002 before assuming the position of President and Chief Executive Officer of the Bank on January 5, 2004. Prior to this, he was Senior Executive Vice President and Chief Operating Officer. He is currently a member of the Executive, Corporate Governance, Trust, Restructuring, Risk Oversight and Finance Committees. He is a Director of LGU Guarantee Corporation (since May 2014) and a Member of the Society of Fellows of the Institute of Corporate Directors (since July 2006). He is a Director of SB Capital Investment Corporation (since April 2004) and Catholic Travel Inc. (since March 2009). He is Governor of the Management Association of the Philippines effective January 2015. He was the President of the Bankers Association of the Philippines (from April 2012 to March 2013) and Director (from March 2014 to October 2015). He was the Chairman of SB Capital Investment Corporation (from April 2004 to May 2015), Security Bank Savings

PAUL Y. UNG Vice Chairman

PAUL Y. UNG, 72, was elected Vice Chairman of the Board on September 29, 1998. He is the Chairman of the Risk Oversight Committee and a member of the Corporate Governance and Executive Committees. He is an Independent Director of Cityland, Inc. (since 2008). He was a Chairman of Century Chemical Corp. (from 1989 to 2005), and Em-Pol Corporation (from 1989 to 2005) and a Director of SB Cards Corporation (from 2003 to 2007). He was President and General Manager of Pacific Paint & Oil Manufacturing, Inc. (from 1967 to 2002), JWL Chemical Corporation (from 1988 to 2005) and Pacific Land (1989 to 2005); he was a Vice President of Atlantic Coatings (from 1989 to 2005) and a Secretary of Road Leader (from 1990 to 2005). He graduated from the University of the Philippines with a Bachelor of Science Degree in Chemistry.

Corporation (from February 2012 to May 2015) and SB Rental Corporation (from May 2014 to May 2015). He was the Chairman of SBM Leasing, Inc. (from July 2011 to May 2014) and a Director of SB Cards Corporation (from December 2012 to June 2013). Mr. Villarosa has extensive banking experience in the areas of Treasury, Investment Banking and Consumer Banking. Prior to joining the Bank, he was the Executive Vice President and Treasurer of Bank of the Philippine Islands (BPI) (from October 1996 to October 2002). During that time, he was a Director in several BPI subsidiaries, among which were BPI Family Bank, BPI Forex Corporation and BPI Investment Management, Inc. Prior to joining BPI, he was Director/President of CityTrust Securities Corp. (from 1998 to 2003) and with CityTrust Banking Corporation (from 1987 to 1996) where the last position he held was Executive Vice President/Treasurer and President of CityTrust Investment Philippines. Prior to this, he was a Vice President of Citibank N.A. (from 1984 to 1987). He graduated from the Asian Institute of Management with a Master’s Degree in Business Management.


ALFONSO L. SALCEDO, JR.Director / President and CEO

DIANA P. AGUILARDirector

ALFONSO L. SALCEDO, JR., 60, was elected Director and appointed as President and Chief Executive Officer of the Bank on April 28, 2015. He is the Chairman of Credit, Management, Policy, Personnel and Acquired Assets Committees and member of the Executive, Risk Oversight, Trust, Restructuring, Assets and Liabilities, Finance and Technology Steering Committees. He is the Chairman of SB Capital Investment Corporation (since May 2015) and Security Bank Savings Corporation (since May 2015) and Director of SB Cards Corporation (since May 2015) and SB Rental Corporation (since May 2015). He is a Trustee of Security Bank Foundation (since April 2015). He is a Director of Bankers Association of the Philippines (since October 2015). Prior to joining the Bank, he was a former executive of the Bank of the Philippine Islands (from 2000 to March 2015), with his last position as Executive Vice President in charge of Corporate Clients Segment. He served as President of BPI Family Savings Bank (2004 to 2010), BPI Insurance Group (2000 to 2004) and Allstate Life Insurance (Philippines) in 1999. He served in the retail banking operations of Citibank Philippines as Country Marketing Director and Retail Bank Business Manager for 10 years before joining BPI. He served as Marketing Director for Nippon Vicks KK (Japan) based in Osaka for five years (1983-1987). He was a member of the Board of BPI’s subsidiaries and affiliates, specifically: BPI Capital Corporation, BPI Direct Savings Bank, BPI International Finance, LTD., Inc., BPI-Philam Life Assurance Corporation, Santiago Land Development Corporation, BPI Rental Corporation, BPI Leasing Corporation and Ayala Automotive Holdings Corporation. He received his AB Economics Honors degree (with honors) from Ateneo de Manila University in 1977 and completed the Advanced Management Program at Harvard Business School in 2006.

DIANA P. AGUILAR, 52, was elected to the Board on November 3, 2010. She is a member of the Bank’s Audit and Corporate Governance Committees and an alternate member of the Bank’s

ANASTASIA Y. DY, 58, was elected to the Board in April 1996. She is the Bank’s Executive Director, appointed in September 1994. She was the Bank’s Corporate Treasurer (from 1994 to September 2004). She is a member of the Risk Oversight, Technology Steering, Management and Personnel Committees and an alternate member of the Executive Committee. She is a Director of Woodchild Holdings (since 1991), Woodson Holdings (since 1991) and Ponderosa Leather Goods, Co., Inc. (since 1995). She is a Trustee of Tany Foundation, Inc. (since January 2007) and a Trustee and President of Security Bank Foundation, Inc. (since 2001), a Trustee/Assistant Corp. Secretary of New Tribes Church Planters of the Phils. (since 2004) and a Trustee/Treasurer of Percept Ministries International of the Phil. Islands (since 2005). She graduated from the University of the Philippines with a Degree in Business Administration and earned units for a Master’s Degree in Business Administration from De La Salle University.

ANASTASIA Y. DYDirector

Executive Committee. She was appointed as a Commissioner of the Social Security System in August 2010. She is a member of the Board of Directors of PLC- Philex Petroleum Corporation (since May 2014), Gate Distribution Enterprise, Inc. (since 1997), DAJ Property Holdings Corp. (since 1996), Electronic Commerce Payment Networks, Inc. (since 2004), Asian Holdings Corp. (since 1994), and Wenphil Corporation (since 1998), and Board Member of Capital Markets Development Board (since 2013). She was elected as Director of PLC- Phil. Seven Corporation (since 1999 to January 2015), Coastal Road Corp. (from 1999 to 2002), CLSA Exchange Capital Corp. (from 2001 to 2002), ERA Phils., Inc. (from 1998 to 2005) and Phoenix Petroleum Philippines, Inc. (from 2010 to 2013). She was Vice President for Corporate Finance of Jardine Fleming Exchange Capital Corporation Group Inc. (from 1988 to 2001) and Member of the Board of Trustees and Treasurer of De La Salle Santiago Zobel School (from 2004 to 2010). She was a Director and Treasurer in Land & Housing Development Corp. (from 1998 to 2002), Franchise One Corporation, (from 2002 to 2006), Cable Entertainment Corp. (from 1998 to 2006). She holds a Master’s degree in Business Administration major in International Finance from Pepperdine University in California and is a Computer Science graduate of De La Salle University.

2 0 1 5 A n n u a l R e p o r t 29

BOARD OF DIRECTORS’ PROFILE

JOSE R. FACUNDO Director

RAFAEL F. SIMPAO, JR. Director

JOSE R. FACUNDO, 77, was elected to the Board in March 2001. He is the Chairman of the Bank’s Trust Committee and a member of the Corporate Governance and Technology Steering Committees. He is a member of the Board of Directors of Siemens Philippines Inc. (since 2003). Prior to joining the Bank, he was the Senior Managing Director of Ayala Corporation (from 1996 to 1999); a Director of Aboitiz Power Corporation (from 2008 to 2012), Alaska Milk Corporation (from 1996 to 2012) and Temic Philippines, Inc. (from 1980 to 2002); the President/CEO of CityTrust Banking Corporation for more than 20 years until its merger with Bank of the Philippine Islands; a Director and a member of the Executive Committee of the Bank of the Philippine Islands (from 1996 to 1999); the President of BPI Capital Corporation (from 1996 to 1999); a Trustee of the Junior Achievement of the Philippines (from 1976 to 2006). He graduated from the Ateneo de Manila University with a degree of Bachelor of Arts in Engineering and took post graduate studies in Statistics at the University of the Philippines, and in Engineering at the Technical University of Munich.

PHILIP T. ANG Independent Director

PHILIP T. ANG, 74, was elected to the Board on February 21, 1980. He is the Chairman of the Corporate Governance Committee, member of the Trust Committee and non-voting member of the Bank’s Executive Committee. He is the Chairman and Director of Hinatuan Mining Corporation and Cagdianao Mining Corporation (since September 2008); Vice Chairman and Director of PLC-Nickel Asia Corporation (since July 2008) and Taganito Mining Corporation (since May 2005). He is a Director of Rio Tuba Nickel Mining Corporation (since 2013). He is the Independent Director of SB Capital Investment Corporation (since February 2010) and SBM Leasing, Inc. (since May 2010). He was the Chairman and President of Solid Mills, Inc. until his retirement in late 2002. He graduated from Oregon University with a degree in Business Administration and a Master’s Degree in Business Administration from the University of Denver.

RAFAEL F. SIMPAO, JR., 72, was elected to the Board in June 1995. He was the President of the Bank from October 31, 1995 to January 4, 2004. Prior to this, he was the Bank’s Senior Vice President (from 1985 to 1991) and Executive Vice President (from 1991 to 1995). He is currently the Chairman of the Bank’s Executive and Restructuring Committees, and a member of the Risk Oversight Committee. He is the Chairman of Security Land

Corporation (since 2011) and Security Bank Foundation, Inc. (since 1997); a Director of SB Capital Investment Corporation (since 1995); a Trustee and Treasurer of New Tribes Church Planters of the Philippines (since 2004); and a Trustee of Tany Foundation, Inc. (since January 2007). He was a Director of Bankers’ Association of the Philippines (from 2002 to 2004), a Director and Treasurer of LGU Guaranty Corporation (from 2000 to 2005), Trustee and Treasurer of Christ’s Commission Fellowship (from 2006 to 2009) and International Graduate School of Leadership (from 1994 to 2014). He graduated from the Ateneo de Manila University with a Bachelor of Science degree in Economics and is a candidate for a Master’s Degree in Business Administration from De La Salle University.


JOSEPH R. HIGDON, 74, was elected to the Board on May 29, 2012. He is an Independent Director of PLC- International Container Terminal Services, Inc. (since 2007) and PLC-SM Investments Corporation (since 2011). He was a Director of the Advisory Board of Coca-Cola Bottling Company, Philippines (from 2007 to 2012) and a Director of BPI Globe BanKO Inc. (from 2010 to 2012). He joined Capital Research and Management, a Los Angeles – based international investment management firm, as a Senior Vice President (from 1974 to 2006) and has covered Philippines stocks (from 1989 to 2006). Prior to this, he was a US Peace Corps Volunteer in the Philippines (from 1962 to 1964). Mr. Higdon holds a BS Degree from the University of Tennessee System.

JAMES J. K. HUNG, 69, was elected to the Board on April 24, 1990. He is the Chairman of the Bank’s Audit Committee and a member of the Risk Oversight Committee. He is the Chairman of Asia Securities Global Group (Hong Kong, since 1993) and Xingya Real Estate Development Co. (China, since 1993). He is a Director of Franklin Templeton Investment Fund (Luxembourg, since 2001) and Franklin Sealand Fund Management Co. Ltd (since 2012). He was a Director in Templeton Emerging Markets Trust Placements (from 1989 to 1999) and Taiwan Index Fund Limited (from 1991 to 2003). He graduated from Babson College with a Master’s Degree in Business Administration, major in Finance.

JOEL RAYMOND R. AYSON, 52, was elected as Corporate Secretary on July 29, 2004. He is a Partner in Quasha, Ancheta, Peña & Nolasco Law Offices (since May 1998 to present). He is a member of Integrated Bar of the Philippines, Philippine Bar Association, Immigration Lawyers Association of the Philippines and University of the Philippines Law Alumni Association. He is a founding member of Students Law for Integrity and Democracy – UP College of Law and UP Association of Political Science Majors. He is the Chairman of Unigrowth Resources & Development Corporation and Quo Vadis Palawan Resort, Inc. and he is a President and Director of Eastern Western Connection Property Inc., Mimo Property, Inc., Bristol Technology System, Inc., ATRM Property Holdings, Inc. He is a Director of Metropolitan Philippines Resorts Corporation (Cebu Beach Club), Parex Realty Corporation, Aztropez, Inc., Tropicana Fresh Farms, Inc., Dubor Backtrennmittel Und Apparatebau AG (Philippines), Inc., Nationshealth Philippines, Inc., Asiamed, Inc. and Back Office Superior Services, Inc. He is a Corporate Secretary of Himlayang Pilipino, Inc./Himlayang Pilipino Plans, Inc., Security Land Corporation, Ceragon Networks Philippines, Inc., Lapu Lapu Resort Development Inc., Tambuli Development Corporation, Bohol Resort Development Inc. He was the Treasurer and Vice President/Director of Integrated Bar of the Philippines, Makati City Chapter (from 2001-2009) before he assumed his position as President (from 2009 to 2011). His practice areas are Civil Litigation, Administrative Law, Immigration Law, Insurance Law, Regulatory, General Practice and Special Projects. He graduated Cum Laude with a degree in Political Science and took post-graduate studies of Bachelor of Laws at the University of the Philippines.

JAMES J. K. HUNG Independent Director

JOEL RAYMOND R. AYSONCorporate Secretary

JOSEPH R. HIGDON Independent Director

2 0 1 5 A n n u a l R e p o r t 31

CORE PRINCIPLESSecurity Bank Corporation (SBC) consistently adheres

to good corporate governance principles of fairness,

accountability and transparency in all its dealings, ensuring

a high degree of integrity in the conduct of its affairs.

The Bank’s board-approved Manual of Corporate

Governance embodies the corporate governance

rules and regulations of the Securities & Exchange

Commission (SEC), Bangko Sentral ng Pilipinas (BSP) and

the Philippine Stock Exchange (PSE) and incorporates

policies on the compliance system. This ensures

disclosure and transparency to uphold the rights of the

Bank’s stockholders and other stakeholders and instill

awareness to the directors, officers and employees of their

responsibilities to conduct business in a safe and sound

manner at all times. The Bank has likewise adopted the

Global Reporting Initiative (GRI) Framework to ensure

compliance with global standards in the disclosure of

environmental, social and economic performance and

impact of the organization.

The Bank fully complies with its Manual on Corporate

Governance. The Bank continually updates its Manual of

Corporate Governance to align itself with the country’s

governance regime and global best practices, particularly

with the ASEAN Corporate Governance Scorecard. This

creates a corporate culture that boosts sustainability

and drive to deliver better customer and shareholder value.

POLICY STATEMENTThe Board of Directors and Management of Security

Bank Corporation and its Subsidiaries commit to the

principles and best practices to promote good corporate

governance as embodied in the regulations of the Bangko

Sentral ng Pilipinas (BSP) and the Securities and Exchange

Commission (SEC).

THE BOARD OF DIRECTORSThe Board of Directors ensures compliance with the

principles and best practices of good governance. It

oversees the Bank’s overall business strategies by confirming

the applicability and adequacy of the mission and vision

statement of the Bank during the January Board meeting.

The Board reviews and approves the strategic plans of the

Bank and notes their alignment with operational plans.

The Board is composed of 11 highly qualified business

professionals. Of the 11, three are independent directors

and two are executive directors. Security Bank has no

director who serves on more than two boards of listed

companies outside of the group. New directors are

given an Orientation Program on the Bank’s businesses.

Continuing education is provided through trainings by

the Bank and by outside service providers. In 2015, the

Board members (together with Senior Officers) attended a

Corporate Governance training.

Security Bank recognizes and embraces diversity in the Board.

Two of the Board members are female in the 50 to 60 age

brackets; eight directors are in the over 60 age group and

two are non-Philippine nationals domiciled abroad. Profiles

of the members of the Board are a part of this report.

The Corporate Governance Committee, through the

Compliance Office, conducts an annual performance

assessment of the Board of Directors (as a collegial body

and individually as Directors), the Board Committees and

the CEO. The Corporate Governance Committee reviews

the current profile of the Board to ensure conformity with

the set qualification standards and appropriate skills which

are aligned with the strategic objectives of the Bank. The

assessment covers full compliance with the provisions and

requirements of the Bank’s Corporate Governance Manual.

CORPORATE GOVERNANCE (G4-38, G4-40, G4-42, G4-43)


The directors receive fees and bonuses, while the executive

officers receive salaries, bonuses and other usual bank benefits.

Executive Directors are entitled to fixed compensation and

performance-based bonus plus fees for attendance in meetings.

Non-executive directors receive performance-based bonus

and fees for attendance in meetings of the Board and its

committees. The Directors and executive officers have no other

compensation plan or arrangement with the Bank. No warrants

or options are held by them. In 2015, executive compensation

inclusive of bonuses for all officers and directors as a group

amounted to P2.0 billion.

The Board meets every last Tuesday of the month in

accordance with the Bank’s by-laws. The Board held a total of

12 meetings in 2015.

Our Corporate Governance Policy calls for us to achieve

excellence in business while behaving in a safe and

environmentally responsible manner to build a sustainable

franchise. Our Sustainability Report is part of this annual report.

The Corporate Governance Committee likewise reviews and

evaluates the qualifications of the Board nominees giving

due consideration of their alignment with the Bank’s strategic

objectives, with the nominations elevated to the Board for

approval and endorsed to the shareholders for election during

the annual meeting of stockholders. Succession planning

in the Board is well in place, wherein vacancies in the Board

may be filled up by appointment or election of the remaining

directors, if still constituting a quorum; otherwise, the

stockholders shall fill such vacancy in a regular annual meeting

or special meeting called for the purpose.

The roles of the Chairman and the Chief Executive

Officer are kept separate. The Chairman is responsible

for ensuring the effective functioning of the Board,

maintaining a relationship of trust with Board members.

He makes sure that a sound decision making process is in

place by encouraging critical discussions, with dissenting

views expressed and discussed and independent views

given due respect and consideration. The Chairman is

assisted by a Corporate Secretary who is responsible for

the safekeeping and preservation of the integrity of the

minutes of meeting of the Board and its committees, and

assists in making business judgments in good faith.

(G4-44)

2 0 1 5 A n n u a l R e p o r t 33

FULL YEAR ATTENDANCE (G4-34)

CORPORATE GOVERNANCE

Attendance

Frederick Y. Dy 12

Alberto S. Villarosa 12

Paul Y. Ung 11

Diana P. Aguilar 11

Anastasia Y. Dy 12

Jose R. Facundo 12

Alfonso L. Salcedo, Jr.* 9

Rafael F. Simpao, Jr. 12

Philip T. Ang 12

Joseph R. Higdon 12

James JK Hung 12

Eduardo I. Plana** 3

BOARD OF DIRECTORS

*Elected in April 28, 2015 vice Mr. Eduardo I. Plana**No longer re-elected, served as Director from January 2015 to March 2015

95% of 6 meetings for 2015

Attendance

James JK Hung - Chairman 6

Joseph R. Higdon 5

Diana P. Aguilar 6

Eduardo I. Plana* 2

AUDIT COMMITTEE

*No longer re-appointed as member effective April 28, 2015


98% of 12 regular meetings for 2015

Attendance

Paul Y. Ung - Chairman 14

Anastasia Y. Dy 14

James JK Hung 14

Rafael F. Simpao, Jr. 14



Joselito E. Mape 14

Ma. Teresa C. Ogbinar** 5

Simeon T. Yap*** 9

RISK OVERSIGHT COMMITTEE

*Appointed as member on April 28, 2015**Appointed as Member and Chief Risk Officer effective August 3, 2015***Designated as OIC effective December 1, 2014 to August 2, 2015


Attendance

Philip T. Ang - Chairman 12

Paul Y. Ung 11

Diana P. Aguilar 11

Jose R. Facundo 12

Joseph R. Higdon 12

Alberto S. Villarosa* 8

CORPORATE GOVERNANCE COMMITTEE

*Appointed as member on April 28, 2015



Attendance

Rafael F. Simpao, Jr - Chairman 4



Eduardo I. Plana** 1

RESTRUCTURING

*Appointed as member effective April 28, 2015*No longer re-appointed as member effective April 28, 2015


Attendance

Jose R. Facundo - Chairman 4

Philip T. Ang 4



Wilfredo S. Talastas** 1

Maricar R. Lopez*** 3

TRUST COMMITTEE

*Appointed as member effective April 28, 2015**Resigned in June 2015***Appointed as member vice Mr. Wilfredo S. Talastas


Attendance

Rafael F. Simpao, Jr. - Chairman 44



Philip T. Ang 36

Paul Y. Ung 36

Frederick Y. Dy** 13

Anastasia Y. Dy** 3

EXECUTIVE COMMITTEE

*Appointed as member effective April 28, 2015**Alternate Member

35 2 0 1 5 A n n u a l R e p o r t

EXECUTIVE COMMITTEEFrom left to right:Philip T. Ang, Rafael F. Simpao, Jr., Paul Y. Ung, Alberto S. Villarosa and Alfonso L. Salcedo, Jr.


Aligned with its attitude towards risk, the Bank’s risk management framework aims to embed a risk management culture that seeks to constantly identify, measure, control, monitor and evaluate risks within the Bank. This drives a risk management process that is both a continuous and a dynamic course of action, ensuring proactive and responsive management of risks. Consequently, the Bank’s risk management structure is largely a system of checks and balances revolving around process and policy management, compliance and active risk oversight.

GOVERNANCE (G4-36)Overall GovernanceThe Board of Directors (BOD) establishes the risk appetite of the Bank and aligns the direction of the business units to achieve strategic goals. The active participation of the BOD is reflected in the working committees it has established to extend its oversight into the Bank’s operations:

• The Risk Oversight Committee reviews, approves and ensures the effective implementation of the Bank’s risk management framework.

• The Audit Committee assists the Board of Directors in its oversight responsibilities on the integrity of the Bank’s financial statements and financial reporting process; systems of internal control, risk management and governance process; performance of the internal and independent auditors; and compliance with applicable laws, rules and regulations and its code of conduct and business ethics.

• The Executive Committee approves credit risk limits of large exposures of the Group, except for DOSRI loans which are approved by the BOD regardless of amount.

• The Loan Restructuring Committee approves remedial strategies on large non-performing exposures of the Group.

• The Corporate Governance Committee oversees the compliance function, evaluates the qualifications of Board and senior management nominees, and conducts Board performance evaluation.

• The Technology Steering Committee oversees the development, implementation and performance of information technology systems in the Group.

Risk Oversight (G4-45, G4-46, G4-47)Risk management oversight from the BOD resides with the Risk Oversight Committee (ROC). Key responsibilities of the ROC are as follows:

• Approve risk oversight strategies for managing and controlling major risks, preventing losses and minimizing them should they occur, including any negative impact to the reputation of the Group;

• Identify and evaluate exposures, assess the probability of each risk materializing and estimate its possible effect and cost;

• Approve the policies and implementing guidelines, where applicable, as may be recommended for risk oversight purposes;

• Oversee the system of limits to discretionary authority that the BOD delegates to Management, ensuring that the limits are observed and that immediate corrective actions are taken whenever limits are breached;

• Report regularly to the BOD the Group’s overall risk exposure and the actions taken to reduce risks, and recommend further action or plans as necessary;

• Ensure the proper and consistent implementation of the risk management plan of the Parent Bank and its subsidiaries;

• Review and revise the risk management plan as needed;• Oversee the management of the Risk Management Group;• Take on additional responsibilities as may be designated by

the BOD.

The ROC’s execution and operational arm is primarily the Risk Management Group, headed by the Chief Risk Officer. The Group’s activities mainly assist the BOD (through the ROC) in fulfilling its risk management responsibilities through the following fundamental tasks:

• Development and review of risk appetite/ limits and policies;

• Assessment, measurement, monitoring and reporting of the Group’s risk-taking and risk management activities, including risk limit utilization and performance;

• Performance of an oversight function for the various subsidiaries;

• Elevation of issues and findings to Senior Management and the ROC.

Security Bank’s risk management adopts and promotes the basic tenet that risks are owned by the respective business and process owners. Everyone in the organization is therefore expected to proactively manage the risks inherent in their respective areas.

RISK MANAGEMENT (G4-2)

2 0 1 5 A n n u a l R e p o r t 37

RISK MANAGEMENT

Risk Management Scope and StructureThe Bank is faced with multiple risks inherent to the business it has chosen, largely in the form of credit, market and liquidity, and operational risks. To protect the opportunities for growth and value creation, the Bank’s risk management is structured to continuously and effectively address these risks.

Credit Risk ManagementCredit risk is the risk of loss resulting from the failure of a borrower or counterparty to perform or complete in a timely manner its obligations during the life of a transaction. This includes the risk of non-payment by borrowers or issuers, failed settlement of transactions and default on contracts. Credit risk arises from both the lending and investment activities of the Group.

As one of the primary risks inherent to banking, the Bank manages credit risk through a systemized approach which includes:

• Development of credit policies and processes that drive all credit proposals through a single “Credit Engine,” where approving limits and authorities of subsidiaries are aligned with the Parent Bank’s credit authorities;

• Use of internal credit risk rating systems for retail and corporate lending activities;

• Establishment of limits that encompass industry, single name, group and large exposures;

• Periodic reporting to the ROC and Senior Management with coverage on concentration risks, credit migration and residual risks across the Group;

• Proactive impairment process involving the lending units as well as the Risk Management Group.

Market Risk ManagementMarket risk is the risk that movements in market factors will have an adverse impact on the Bank’s portfolio values, income and/ or capital. Market factors include foreign exchange rates, interest rates, equity prices and their volatilities. This risk applies to both the Group’s trading (financial and acquired assets) and accrual positions, largely in two forms:

• Price risk, the risk that the Bank’s capital and gains will decline due to the impact of changes in the level or volatility of market factors to positions taken or held in the trading books.

• Interest rate risk in the banking book (IRRBB), the risk that the Bank’s capital and earnings will deteriorate due to effects of interest rate movements on the Bank’s balance sheet, mainly on the accrual books.

Given its sensitivity to the pace of change of market factors, the Bank manages market risk through a variety of structures involving the following:

• Use of Value-at-Risk (VaR) methods, Earnings-at-Risk (EaR) techniques particularly for IRRBB management, loss triggers and stress testing;

• Adoption of limits aside from those related to VaR, EaR and P&L, such as exposure and position limits, and performance of stress testing to augment the primary measures;

• Periodic reporting of limit status, re-pricing gaps (for IRRBB) and P&L to the ROC, Senior Management and other concerned parties;

• Development and review of risk models used for monitoring market risk, as well as validating the models developed internally or by third-party vendors.

RISK OVERSIGHT COMMITTEE

CHIEF RISKOFFICER

CREDIT RISK MARKET RISK(INCLUDES LIQUIDITY RISK) OPERATIONAL RISK

CREDIT RISK POLICYAND MONITORING

PORTFOLIOREVIEW/AUDIT

MARKET RISK POLICYAND MONITORING

QUANTITATIVESUPPORT

MONITORING

ANALYTICS/MIS

FRAUD

OPERATIONAL RISK POLICY AND

MONITORING

INFORMATIONSECURITY

BUSINESSCONTINUITY


Liquidity Risk ManagementLiquidity risk is the risk that the Bank will not be able to meet its obligations when they become due. It may be classified into two sub-types:

• Funding liquidity risk, the risk that a firm cannot obtain the necessary funds to meet its obligations as they fall due. It stems from the mismatch of asset, liability, exchange contract and contingent commitment maturities.

• Trading liquidity risk, the risk that an entity will be unable to unwind a position in a particular instrument at or near its market value because of lack of depth or disruption in the market for that instrument.

With liquidity being the lifeline of banks, this risk is mainly monitored through tools such as liquidity gap reports including the Maximum Cumulative Outflow (MCO) status, liquidity ratios and monitoring of large fund providers. This is further augmented by periodic liquidity stress testing. Regular reports are then provided to Senior Management, the Asset and Liability Committee (ALCO) and the ROC regarding these tools. Moreover, the Bank has established Contingency Funding Plans to counter potential liquidity crisis situations.

Operational Risk ManagementAligned with the Basel II Framework, operational risk is defined as the risk of loss due to inadequate or failed internal processes, people and systems or from external events.

Operational risk is primarily managed at source. The tools, program and methods used in the operational risk management process are mainly the Risk and Control Self-Assessment (RCSA), Ops Loss Database, Issue Escalation and Incident Reporting

(IE/ IR) Process, Key Risk Indicators (KRI), Business Continuity Planning (BCP) and Centralized Document Library (CDL). Quality Assurance personnel, Associated Persons, Operational Risk and BCP Coordinators of the Bank are all tasked with coordinating the implementation and maintenance of the operational risk management processes in their respective units as designated by Senior Management.

The Bank adopts the Three Lines of Defense framework in managing operational risk:1. First Line of Defense - Everyone in the organization ( Business

Line Management)2. Second Line of Defense - Risk Oversight Functions (RMG and

Compliance Office)

3. Third Line of Defense - Internal Audit

Management of Other RisksWhile the risks that the Bank face are chiefly of credit, market and operational types, SBC recognizes with as much importance the other risks that can hinder its pursuit for value creation. In particular, the Bank acknowledges the threats posed by compliance, reputational and strategic (or business) risks:

• Compliance risk refers to the penalties and the possible loss of the Group’s banking licenses from breaches in the requirements mandated by regulators. Inclusion of Compliance Division in key committees like AMLA, Investigation and Product Committees; dissemination of and advisory on key points of new and existing regulations to Corporate Governance and Senior Management; proper cascading of regulatory requirements and regulations; and timely, proper and efficient reporting to regulators are some of the means by which the Bank manages compliance risk.

CORPORATE SUSTAINABILITY (G4-35)

Risk Capital

Ongoing Evaluation Identify

the Risk

Measurethe Risk

Controlthe Risk

Monitorthe Risk

RISK MANAGEMENT

CAPITAL MANAGEMENT AND ALLOCATION

RESOURCE ALIGNMENT AND COORDINATION

Systems

People Process

2 0 1 5 A n n u a l R e p o r t 39

• Reputational risk refers to the potential adverse effects arising from the Bank’s reputation deviating negatively from its expected level, with regard to competence, integrity and reliability. The Bank manages this risk within the institution through policies and processes implemented under Operational Risk (including Information Security), Compliance and Human Resources, such as those related to complaints resolution and management; fraud detection, prevention and overall management; and service quality assurance.

• Strategic or business risk is the current and prospective impact on earnings or capital arising from adverse business decisions, ineffective or failed implementation of decisions, or lack of responsiveness to industry changes. This risk is not managed separately from other risks. In essence, the Bank manages this risk through careful planning and close monitoring of execution of plans. To wit:o The Group undergoes an annual Planning Cycle,

where the business environment, medium-term plans of business units and potential risks to the Bank are assessed. A Strategic Plan is produced at the end of this activity. Through this plan, the BOD provides direction for the Group and identifies probable new risks that may emerge over the planning cycle.

o Periodic review of the strategies and performance of key functional areas or indicators are undertaken by the Senior Management and the BOD.

The Bank understands that the risk universe is not limited to the ones enumerated earlier. As such, other types of risk – new or evolving – are uncovered and addressed through the different initiatives in the main risk management groups, which motivate risk-taking and risk management units to assess and to attend to emerging threats to capital adequacy and profitability.

Capital ManagementThe primary objectives of the Group’s capital management are to ensure that it maintains strong credit ratings and healthy capital ratios in support of its business and to remain compliant with externally imposed capital requirements, all while maximizing shareholders’ value.

For 2015, SBC remains well in compliance with the capital requirements of the Basel III Framework. This is largely driven by the Bank’s mindful approach to risk and capital management. Minimum capital levels and adequacy ratios as required by regulatory standards are used by the Bank merely as a starting point. Annually, the Bank assesses its current and planned business and risk-taking activities, and their comparison to the

RISK MANAGEMENT

Efforts of the Risk Management Group for 2015 largely revolved around enhancing risk management capabilities, driven by regulatory standards and Senior Management motivation. Highlights for the year are the following:

BOD’s risk appetite taken under the context of macroeconomic and industry developments. This assessment is summarized in the Bank’s Internal Capital Adequacy Assessment Process (ICAAP) Document and is submitted to the BSP. The document highlights SBC’s medium-term plans, the minimum capital it expects to maintain, capital triggers and contingency plans.

The Senior Management Committee primarily responsible for driving the Group’s ICAAP, working alongside the other members of Senior Management in implementing the strategic goals as approved by the BOD is the Finance Committee. In essence, this Committee assesses the Group’s capital adequacy relative to its risk profile, understanding capital requirements as scenarios vary or become stressed.

Risk exposures and corresponding capital requirements vis-à-vis current capital levels are periodically reviewed, ensuring risk and capital are aligned to SBC’s appetite and activities, and to the regulatory standards.

2015 HIGHLIGHTS

• Implementation project for the acquired Asset

Liability Management and Basel III systems, designed

to automate, streamline and improve efficiency of

liquidity risk, interest rate risk and capital management

reporting and monitoring;

• Implementation of Leverage Ratio and roll-out of

Liquidity Coverage Ratio as required by the BSP;

• Gap analysis as required by the updated Guidelines on

Sound Credit Risk Management Practices (BSP Circular

No. 855) and as the Bank gears up for IFRS 9: Expected

Credit Losses;

• Strengthening of the information architecture required

for credit risk management;

• Ensuring that RCSA is made a fundamental part of

operational risk management; and,

• Strengthening the Three Lines of Defense Framework,

as an enhancement to operational risk management.


STATEMENT OF COMPLIANCE POLICYThe Bank commits to comply with all banking and consumer laws and regulations. All employees are directed and expected to consistently and fully comply with the specific details and the spirit of all banking and consumer laws and regulations. In this regard, the Bank shall continuously enhance the formal and structured compliance program that will assist management and the Board in identifying, measuring, monitoring, and controlling compliance and business risks.

COMPLIANCE SYSTEM (G4-DMA)The Bank’s compliance system promotes a culture of bank-wide adherence to compliance standards, allows identification and mitigation of business risks that erode the Bank’s franchise value and reinforces the stature of the Chief Compliance Officer as independent from the Bank’s business activities. It is supported by effective and efficient Board of Directors and Senior Management oversight, sound policies and procedures embodied in a Compliance Policy & Program Manual approved by the Board of Directors and effectively implemented by Senior Management, and robust internal controls and audit.

REGULATORY COMPLIANCE The Compliance Office oversees the implementation of the Group’s compliance programs, ensuring employee awareness and compliance with all applicable laws, rules and regulations. The programs consider the size and complexity of the Bank and its subsidiaries, the relevant rules and regulations that affect their operations, and the business risks that may arise due to non-compliance. Risk-based regulatory and self-assessment compliance matrices which are aligned with the business exposures and priorities are formulated to mitigate identified business risks and tested based on set verification procedures to ensure compliance and immediately resolve issues and exceptions, if any.

The Compliance Office has forged strong alliances with the Internal Audit, Risk Management Group, Legal, and the designated Auxiliary Compliance Officers (ACOs) who are embedded and responsible for the major operational and support units of the Bank. The ACOs are directed to primarily enforce compliance with rules and regulations pertinent to their respective units and timely report issues or exceptions noted to the Compliance Office.

The Compliance Office takes a pro-active role in partnering with the Business and Operations units to ensure a high level of compliance across the institution. The Compliance Office aligns its compliance activities and investments with business priorities in the light of more stringent regulations, technological innovations and emerging threats. The Compliance Office, acting as business enablers, continually works on maintaining the Bank’s adherence to compliance standards.

The Compliance Office promotes compliance awareness among officers and staff through dissemination of regulatory issuances, table discussions and classroom training, advisory on regulatory issues to arrest business risks, periodic compliance testing and regular monitoring of consistent implementation of compliance controls with timely and focused feedback on status of business and operating units’ fulfillment of regulatory responsibilities. It maintains a clear and open communication process within the SBC group to provide personnel with a clear understanding of banking and other pertinent laws, rules and regulations, as well as the risks and effects of non-compliance. Through continuous dialogue and liaison with regulators, the Compliance Office ensures the prompt dissemination of new regulations and other developments affecting bank operations.

The Bank’s Compliance Program is periodically updated to strengthen implementation of a more robust, dynamically responsive compliance system, taking into consideration all banking and consumer laws and regulations and the BSP Compliance Rating System.

ANTI-MONEY LAUNDERING (AML) (G4-S03, G4-04, G4-DMA)It is the policy of the Bank to conduct business in conformity with high ethical standards in order to protect the reputation and integrity of the banking system from becoming a vehicle or conduit for or a victim of financial crime and to protect the diverse interests of the Bank’s stockholders and other stakeholders. Likewise, the Bank is committed to the highest standards of moral and ethical behavior and is opposed to any unethical behavior such as fraud and corruption

Anchored on the Bangko Sentral ng Pilipinas’ (BSP) prescribed Money Laundering and Terrorist Financing Prevention Program (MLPP), the Bank’s MLPP incorporates legal and regulatory updates and global best practices in AML and Combating the Financing of Terrorism (CFT) policies and procedures.

The Bank constantly reviews and updates the MLPP to ensure compliance with the latest legislative and regulatory developments and reflect refinements in the customer risk rating and acceptance policy and on-going monitoring of clients, accounts and transactions. In addition, the MLPP incorporates the compliance testing program guide used in compliance testing and the procedural guidelines for reportorial requirements and other major AML compliance functions and processes. The last update was made in December 2015.

COMPLIANCE

2 0 1 5 A n n u a l R e p o r t 41

The Bank also continually strengthens its on-going initiatives to instill AML awareness and discipline through enhanced AML and CFT training, adoption and conduct of risk-based compliance testing and monitoring of accounts, the upgrading and review of alert parameters of the electronic anti-money laundering monitoring and reporting system and institutionalizing shared responsibilities in ensuring timeliness and accuracy of Covered Transaction & Suspicious Transaction reports .

These technical and human enhancements will further improve the AML/CFT risk management system, good corporate governance practices and sustain the overall money laundering and terrorist financing prevention risk management and control framework of the SBC group.

FATCAIn compliance with the Intergovernmental Agreement (IGA) Model 1 signed between the Internal Revenue Service of the United States and the Philippines’ Bureau of Internal Revenue, Security Bank registered as the lead of the Expanded Affiliated Group with Global Intermediary Identification Number (GIIN) as follows:

Security Bank - VF107Z.00000.LE.608SB Capital - VF107Z.00001.ME.608SB Cards - VF107Z.00002.ME.608SB Equities - VF107Z.00003.ME.608SB Savings - VF107Z.00004.ME.608

As such, Security Bank is a Reporting Model I Foreign Financial Institution.

The IGA requires a partner government to require all financial institutions located in its jurisdiction to identify U.S. accounts and report information about U.S. accounts. Model 1 IGA can be implemented without having in effect a double tax convention or tax information exchange agreement with the United

States. IGAs with partner jurisdictions facilitate the effective and efficient implementation of FATCA:

• They remove domestic legal impediments to compliance.

• They reduce burdens on FFIs located in partner jurisdictions.

The Foreign Account Tax Compliance Act (FATCA), is a US extraterritorial law which became effective on July 01, 2014. FATCA targets tax non-compliance by U.S. taxpayers with foreign accounts. FATCA focuses on reporting: • By U.S. taxpayers about certain

foreign financial accounts and offshore assets

• By financial institutions about financial accounts held by U.S. taxpayers or foreign entities in which U.S. taxpayers hold a substantial ownership interest.

The objective of FATCA is the reporting of foreign financial assets; withholding is the cost of not reporting.

POLICY ON RELATED PARTY TRANSACTIONSThe Bank recognizes that related party transactions may give rise to conflict of interest. The Board of Directors ensures that transactions with related parties, including DOSRI, are handled in a sound and prudent manner, with integrity and in compliance with applicable laws and regulations to protect the interest of depositors, creditors and other stakeholders.

Full disclosures of the Bank’s significant related party transactions for the year 2015 were made through reports with the appropriate regulatory agency. Likewise, significant related-party transactions are confirmed by a majority of the Bank’s stockholders during the annual meeting of stockholders.

OTHER CORPORATE GOVERNANCE POLICIES/PERSONAL INVESTMENT POLICYThe Bank has a Personal Investment Policy that governs personal transactions of all Security Bank personnel to ensure that these are done above-board. Certain Security Bank personnel, by virtue of their responsibilities, are treated as Restricted Persons which consequently requires that their personal transactions be subject to prior approval by the Chief Financial Officer (CFO) and the President/CEO. Likewise, all Treasury Officers/Staff and members of their immediate families are prohibited from engaging in any derivative transaction of the Bank. The actions of the corporation, Board of Directors and employees are conducted according to the highest ethical and professional standards as embodied in the Code of Ethics. The Code is posted in the Bank’s intranet and is accessible to all employees. The Bank complies with disclosure and black-out rules covering dealings of the Directors and Senior Officers in the Bank’s shares as listed in the Philippine Stock Exchange.

TRADING ON SECB SHARESAs a publicly listed company, the Bank strictly observes the prohibition on insider trading under Section 27 of the Securities Regulation Code (SRC). Towards this end and consistent with the principles of fair dealing and transparency in the securities market, a Director or Officer with the rank of Senior Vice-President and up, when dealing in the Bank’s shares, are required to notify the Board through the Office of the Corporate Secretary (OCS) of his intention to deal in SECB shares at least one day prior to trading and to submit the necessary SEC Form 23A (Initial Statement of Beneficial Ownership of Securities) and/or SEC Form 23B (Statement of Changes in Beneficial Ownership of Securities) to the Securities and Exchange Commission and the Philippine Stock Exchange within three business days from initial acquisition or

COMPLIANCE


changes (subsequent acquisition or disposal). Likewise, he shall coordinate with the OCS to ensure the timely filing of said reports.

The Bank likewise strictly prohibits the short selling of SECB shares by any of its Director or Officer in accordance with the applicable provisions of the SRC and its Amended Implementing Rules and Regulations.

POLICY ON CONFLICT OF INTEREST (G4-41)Directors, officers and employees are prohibited from engaging in transactions for the Bank which are self-serving, usurp authority and are with conflict of interest. No one should acquire personal gain in the exercise of his authority or employment in the Bank.

CODE OF CONDUCTThe Bank’s Code of Conduct outlines the rules on Conduct and Decorum, Established Operations and Procedures, Honesty, Integrity and Ethics. It serves as a reference for our employees in maintaining their sense of responsibility and commitment to honesty, industry and integrity, and establishes measures and standards to institute discipline. It also provides for whistleblowers a system to encourage employees to internally report fraudulent, illegal or excessively risky activity to defined channels. An enhancement of the Code, specifically for the Conduct of the members of the Board of Directors was put in place in 2013.

The whistle-blowing policy encourages and allows employees to report in good faith without fear of discrimination, harassment and/or retaliation because Management ensures anonymity and non-disclosure of information about the whistleblower other than to the investigating body.

Disclosures are directed to the immediate superior or any supervising officer within the group or may be elevated to the Human Resources Development Division (HRDD), Internal Audit or Quality Assurance Officers for branches, Risk Management Group, Executive Director or President. The reporting authority shall require accountable employee/s to submit an incident report within the day of occurrence or discovery of the incident (as applicable). Thorough investigation shall be conducted to establish validity of the report in consonance with due process as prescribed by the Bank’s Code of Conduct.

INTERNAL AUDITThe Bank’s Internal Audit Division provides reasonable assurance to the Board, Senior Management and stockholders that the Bank’s key organizational and procedural controls are effective, appropriate and complied with.

Internal Audit covers at the minimum the evaluation of the adequacy and effectiveness of controls that cover governance, operations and information systems, reliability and integrity of

financial and operational information; effectiveness and efficiency of operations; protection of assets; and compliance with contracts, laws, rules and regulations.

In April 2015, the Bank amended its Audit Committee Charter to align with international standards and best practices in internal control and internal audit, and in compliance with BSP Circular No. 871 (Series of 2015). The amendment expanded the functions of the Audit Committee to include, among others, the commissioning of an assessment team outside of the Bank to conduct an independent quality assurance review of the internal audit function every five years, as well as monitoring and reviewing the effectiveness of the internal audit function and internal audit service provider.

COMMUNICATION AND INFORMATION (G4-37, G4-49)The Bank discloses publicly and in a timely manner all material information which could potentially affect its viability or the interests of the stockholders. All material information is disclosed through the appropriate Exchange mechanisms and posted in the Bank’s website.

EMPLOYEE / REGULAR AUDIT /COMPLAINTS, ETC

• Report employee offense / irregularity

TO IMMEDIATE SUPERIOR• Require accountable employee to submit a written report• Conduct preliminary investigation• Seek assistance from other units as necessary• Collate documents / evidences• Submit report to Area/Division/Group Head

TO HRDD• Refer matter to appropriate investigative /

fact finding body for further investigation• Receive report from investigative body• Decide on / implement sanctions if offense is not

within purview of IC• Elevate offense to IC if within IC purview

AREA / DIVISION / GROUP HEADReview initial report• Decide on / implement sanctions in

coordination with HRDD if offense is not within purview of IC

• Elevate offense to IC if within IC purviewINVESTIGATION COMMITTEE (IC)• Deliberate case; conduct own inquiry• Render decision

2 0 1 5 A n n u a l R e p o r t 43

SECURITY BANK CORPORATION AND SUBSIDIARIES

Audit Committee ReportFor the year ended December 31, 2015

The Audit Committee is composed of three (3) non-executive directors, two of whom are independent directors, including the chairman. The committee is governed by a board-approved charter that defines the overall purpose, authority, organization, meeting requirements and responsibilities. In accordance with this charter, the committee assists the Board of Directors in its oversight responsibilities on the following, thereby enhancing shareholders’ and other stakeholders’ value and protecting their interest:

a) Integrity of the Bank’s financial statements and financial reporting process;

b) Systems of internal control, risk management and governance process;

c) Performance of the internal audit function and independent auditors;d) Compliance with applicable laws, rules and regulations, and its code

of conduct and business ethics;e) Fulfillment of other responsibilities set out in the Audit Committee

Charter.

The Bank has an Internal Audit Division that reports directly to the Audit Committee and assists in the discharge of its oversight responsibilities. The Internal Audit, governed by a charter approved by the Audit Committee, is responsible for providing an independent, reasonable assurance on the Bank’s systems of internal control, risk management and governance processes, as well as the operating and business units’ adherence to internal processes and procedures and to regulatory and legal requirements.

In performing its oversight responsibilities and in compliance with the Audit Committee Charter and applicable corporate governance laws and rules, the Audit Committee confirmed in its report for 2015 the following:

A. Bank’s financial statements and financial reporting processThe results of internal and external audits of the Bank’s internal controls relative to the financial reporting process were discussed. The audited financial statements and its related disclosures for the year ended December 31, 2015, were discussed with the external auditor. After obtaining the external auditor’s unqualified opinion on the financial statements, the audit committee endorsed the audited financial statements for approval by the Board of Directors and for inclusion in the 2015 Annual Report to the Stockholders. The Management Representation Letter was also reviewed to ensure that items in the letter are complete and appropriate before this was transmitted to the external auditor.

B. Systems of internal control, management of risks and governance The results of external and internal audits of the Bank’s internal control, risk management and governance were discussed. The Audit Committee also ensured that management is taking appropriate corrective actions in a timely manner and addressing risk exposures, internal control, governance and compliance issues.

C. Performance of the independent auditors and internal audit function External Audit1. SGV & Co. was re-appointed as the Bank’s external auditor

for the 2015 financial statements based on the results of performance assessment conducted by designated officers of the Bank. They were likewise appointed to conduct non-audit services during the year.

2. The plan and scope, including audit fees, of the Bank’s external auditor were discussed and approved.

3. The committee had an executive session with the external auditor and the Chief Audit Executive (CAE) ensuring no interference with the accomplishment of audit activities and reporting of issues.

Internal Audit1. The Internal Audit Charter was reviewed and approved on April

27, 2015 ensuring appropriateness of duties, responsibilities, scope, rights and independence of the Internal Audit function.

2. Continuing improvements and enhancements to audit policies and methodologies were discussed and approved ensuring appropriateness and conformance with regulatory requirements and international standards.

3. The Internal Audit’s strategic 3-year plan and annual audit plan were discussed and approved. The Committee monitored the performance to be in accordance with the approved audit plans.

4. Remuneration of the CAE and key internal auditors were discussed and approved.

5. An annual performance assessment of the CAE was conducted.6. The organizational independence of the Internal Audit function is

maintained as confirmed by the CAE. Regular self-certification is in place to confirm independence of Internal Audit personnel as well as compliance with the Code of Ethics.

7. The Internal Audit conducts its functions in accordance with the standards set forth by the Bank’s internal policies, the Audit Manual, regulatory requirements, and by the International Standards for the Professional Practice of Internal Auditing (ISPPIA) as confirmed by the CAE.

D. Compliance with applicable laws, rules and regulations, and its code of conduct and business ethicsThe Audit Committee, through the Internal Audit function, assesses compliance with applicable laws, rules and regulations, and the Company’s code of conduct and business ethics including the effectiveness of the system of monitoring resolutions of outstanding regulatory issues.

E. Performance of the Audit Committee1. The committee met six (6) times during the year with an average

of 95% attendance.2. The Audit Committee Charter was reviewed and revised on

April 27, 2015 ensuring alignment with regulatory requirements and international standards.

3. An annual performance assessment of the Audit Committee and individual assessment of committee members were conducted.

4. As part of the continuing education program, the committee attended the Corporate Governance training conducted by the Institute of Corporate Directors.

Based on the reviews and discussions undertaken, including the unqualified opinion of the external auditor on the Bank’s financial statements, reasonable assurance can be given that the systems of internal control, risk management and governance is generally sound and designed to meet the organization’s business objectives.

James JK HungAudit Committee Chairman


Securities and Exchange CommissionSEC Building, EDSA, GreenhillsMandaluyong City

The management of Security Bank Corporation and Subsidiaries (the Group) is responsible for the preparation and fair presentation of the consolidated financial statements for the years ended December 31, 2015 and 2014, including the additional components attached therein, in accordance with Philippine Financial Reporting Standards. This responsibility includes designing and implementing internal controls relevant to the preparation and fair presentation of the consolidated financial statements that are free from material misstatement, whether due to fraud or error, selecting and applying appropriate accounting policies, and making accounting estimates that are reasonable in the circumstances.

The Board of Directors reviews and approves the consolidated financial statements and submits the same to the stockholders.

SyCip Gorres Velayo & Co., the independent auditors appointed by the stockholders for the period December 31, 2015 and 2014 has examined the financial statements of the Bank in accordance with Philippine Standards on Auditing, and its report to the stockholders, has expressed its opinion on the fairness of presentation upon completion of such examination.

Alberto S. VillarosaChairman of the Board

Alfonso L. Salcedo, Jr.President & Chief Executive Officer

Joselito E. MapeChief Financial Officer

Signed this 23rd day of February 2016

SUBSCRIBED AND SWORN to before me _________________________________ affiants exhibiting to me their Passport and Driver’s License as follows:

NAMES ID NUMBER DATE OF ISSUE PLACE OF ISSUEAlberto S. Villarosa EB2144121 March 25, 2011 Manila CityAlfonso L. Salcedo, Jr. EB2670619 June 13, 2011 Manila CityJoselito E. Mape EB9611845 November 18, 2013 Manila City

Doc. No. 244Page No. 60Book No. XXSeries of 2016.


Statement of Management Responsibility for Consolidated Financial Statements

2 0 1 5 A n n u a l R e p o r t 45

The Stockholders and the Board of Directors

Security Bank Corporation

Report on the Financial Statements

We have audited the accompanying consolidated financial statements of Security Bank Corporation and Subsidiaries (the Group) and of Security Bank Corporation (the Parent Company), which comprise the statements of financial position as at December 31, 2015 and 2014, and the statements of income, statements of comprehensive income, statements of changes in equity and statements of cash flows for each of the three years in the period ended December 31, 2015, and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial StatementsThe Group’s management is responsible for the preparation and fair presentation of the financial statements in accordance with Philippine Financial Reporting Standards, and for such internal control as the Group’s management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ ResponsibilityOur responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with Philippine Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Group and of the Parent Company as at

December 31, 2015 and 2014, and their financial performance and their cash flows for each of the three years in the period ended December 31, 2015,

in accordance with Philippine Financial Reporting Standards.

Report on the Supplementary Information Required Under Revenue Regulations 15-2010

Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplementary information required under Revenue Regulations 15-2010 in Note 40 to the financial statements is presented for purposes of filing with the Bureau of Internal Revenue and is not a required part of the basic financial statements. Such information is the responsibility of the management of the Parent Company. The information has been subjected to the auditing procedures applied in our audit of the basic financial statements. In our opinion, the information is fairly stated in all material respects in relation to the basic financial statements taken as a whole.

SYCIP GORRES VELAYO & CO.

Aris C. MalanticPartnerCPA Certificate No. 90190SEC Accreditation No. 0326-AR-3 (Group A), May 1, 2015, valid until April 30, 2018Tax Identification No. 152-884-691BIR Accreditation No. 08-001998-54-2015, February 27, 2015, valid until February 26, 2018

PTR No. 5321657, January 4, 2016, Makati City

February 23, 2016


Independent Auditors’ Report



Statements of Financial Position (G4-EC1)

Consolidated Parent CompanyDecember 31

2015 2014 2015 2014(Amounts in Thousands)

ASSETSCash and Other Cash Items P6,646,264 P5,619,751 P6,646,157 P5,307,008Due from Bangko Sentral ng Pilipinas (Note 17) 56,882,313 35,843,596 55,989,081 34,671,149Due from Other Banks (Notes 26 and 32) 31,365,366 39,129,595 31,290,503 39,047,042Financial Assets at Fair Value through Profit or Loss (Note 9) 2,924,321 10,921,822 2,923,827 10,919,600Financial Assets at Fair Value through Other Comprehensive Income

(Note 10) 166,281 150,780 106,860 70,770Investment Securities at Amortized Cost (Note 11) 184,447,615 101,484,843 184,447,615 101,033,144Loans and Receivables (Notes 12 and 32) 240,187,084 194,004,086 238,616,857 184,379,421Investments in Subsidiaries and a Joint Venture (Note 13) 220,211 197,352 3,754,205 4,683,449Property and Equipment (Note 14) 2,694,887 2,423,158 2,435,338 2,155,644Investment Properties (Note 15) 527,657 1,780,886 536,877 323,655Deferred Tax Assets (Note 28) 1,047,715 1,000,169 953,066 947,794Goodwill (Note 4) 841,602 841,602 – –Intangible Assets (Note 16) 1,555,972 1,499,910 1,522,340 1,088,058Other Assets (Note 16) 2,693,505 2,300,784 2,583,607 1,721,601

TOTAL ASSETS P532,200,793 P397,198,334 P531,806,333 P386,348,335

LIABILITIES AND EQUITY

LIABILITIESDeposit Liabilities (Notes 17 and 32)Demand P78,289,358 P63,120,095 P78,804,538 P62,031,928Savings 145,973,236 116,285,207 146,333,016 115,354,682Time 55,301,581 57,455,062 55,920,610 51,943,268Long-term Negotiable Certificates of Deposit 9,962,290 9,952,430 9,962,290 9,952,430

289,526,465 246,812,794 291,020,454 239,282,308Financial Liabilities at Fair Value through Profit or Loss (Notes 6 and 18) 734,542 582,867 734,542 582,867Derivative Liabilities Designated as Hedges (Notes 6, 12 and 19) 17,686 58,288 17,686 58,288Bills Payable and Securities Sold Under Repurchase Agreements (Note 20) 150,102,194 79,601,534 150,102,194 79,483,534Acceptances Payable 342,158 294,373 342,158 294,373Margin Deposits and Cash Letters of Credit 324,975 32,972 324,975 32,972Manager’s and Certified Checks Outstanding 2,773,456 2,156,837 2,773,456 2,109,174Income Tax Payable (Note 28) 109,612 47,014 93,117 309Notes Payable (Note 21) 14,062,678 − 14,062,678 –Subordinated Note (Note 22) 9,938,945 9,933,491 9,938,945 9,933,491Accrued Interest, Taxes and Other Expenses (Note 23) 2,941,317 2,139,285 2,836,023 1,915,507Other Liabilities (Note 24) 8,111,968 7,581,840 7,024,128 6,620,142

TOTAL LIABILITIES 478,985,996 349,241,295 479,270,356 340,312,965

EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT COMPANYCapital stock (Note 26) 6,088,594 6,088,594 6,088,594 6,088,594Additional paid-in capital 3,210,200 3,210,200 3,236,905 3,236,905Surplus reserves (Note 26) 492,727 487,771 462,983 442,783Surplus (Notes 26 and 29) 43,223,291 36,951,697 42,578,285 36,148,929Net unrealized gain on financial assets at fair value through other comprehensive

income (Note 10) 56,058 41,930 50,878 41,930Net unrealized gain on subsidiaries’ financial assets at fair value through other

comprehensive income (Note 10) 20,439 24,851 – –Cumulative foreign currency translation 118,360 76,246 118,332 76,229

53,209,669 46,881,289 52,535,977 46,035,370NON-CONTROLLING INTEREST (Note 13) 5,128 1,075,750 − –TOTAL EQUITY 53,214,797 47,957,039 52,535,977 46,035,370TOTAL LIABILITIES AND EQUITY P532,200,793 P397,198,334 P531,806,333 P386,348,335

See accompanying Notes to Financial Statements.

2 0 1 5 A n n u a l R e p o r t 47


Statements of Income

Consolidated Parent CompanyYears Ended December 31

2015 2014 2013 2015 2014 2013(As Restated - Note 13)

(Amounts in Thousands, Except Earnings per Share)CONTINUING OPERATIONSINTEREST INCOME ONLoans and receivables (Notes 12 and 32) P11,002,230 P9,308,912 P7,902,346 P10,658,856 P8,309,935 P7,195,393Financial investments (Note 7) 7,270,543 5,845,888 3,640,554 7,266,162 5,825,738 3,620,120Interbank loans receivable and securities purchased under resale

agreements with the Bangko Sentral ng Pilipinas (Note 32) 9,546 126,954 444,935 6,277 115,263 433,588Deposits with banks and others 66,316 92,617 327,809 52,981 81,184 299,192

18,348,635 15,374,371 12,315,644 17,984,276 14,332,120 11,548,293

INTEREST EXPENSE ONDeposit liabilities (Notes 17 and 32) 3,196,563 2,540,115 2,196,046 3,143,654 2,389,528 2,071,683Derivative instruments (Note 18) 910,549 789,275 997,826 910,549 789,275 997,826Subordinated note, bills payable and securities sold under repurchase

agreements, notes payable, and other borrowings (Notes 20 and 21) 1,817,604 855,872 656,467 1,813,059 851,940 651,672Derivatives designated as hedges (Note 19) 25,245 47,863 96,911 25,245 47,863 96,911

5,949,961 4,233,125 3,947,250 5,892,507 4,078,606 3,818,092

NET INTEREST INCOME 12,398,674 11,141,246 8,368,394 12,091,769 10,253,514 7,730,201Gain on disposal of investment securities at amortized cost

(Notes 8 and 11) 2,067,016 3,079,540 2,212,225 2,067,016 3,079,540 2,212,225Gain on reclassification of investment securities at amortized cost to

financial assets at fair value through profit or loss (Notes 8 and 11) 625,926 − − 625,926 − −Service charges, fees and commissions (Note 30) 2,109,627 1,514,891 1,379,784 1,477,445 719,012 575,843Trading and securities gain - net (Note 8) 174,679 515,907 32,764 180,968 513,988 102,149Profit from assets sold/exchanged (Notes 14, 15 and 16) 78,053 93,005 146,374 53,838 54,867 64,365Rent (Notes 15, 32 and 33) 78,215 37,365 39,344 38,269 35,374 41,187Share in net income of a joint venture (Note 13) 22,859 25,523 18,389 – – –Foreign exchange gain (loss) - net (Note 6) 298,309 (173,926) (341,811) 281,628 (188,385) (357,958)Miscellaneous (Note 31) 455,639 354,086 287,027 444,857 384,790 256,386

TOTAL OPERATING INCOME 18,308,997 16,587,637 12,142,490 17,261,716 14,852,700 10,624,398

OPERATING EXPENSESCompensation and fringe benefits (Notes 29 and 32) 3,091,477 2,619,103 2,316,340 2,858,595 2,290,710 2,010,076Taxes and licenses (Note 28) 1,272,871 1,005,650 911,296 1,206,790 894,980 820,857Provision for credit losses (Note 12) 628,208 790,065 128,118 616,013 626,146 10,410Occupancy costs (Notes 15 and 33) 816,145 724,746 606,402 781,551 585,551 475,602Depreciation and amortization (Note 14) 582,747 505,522 411,553 521,979 424,137 329,245Amortization of software costs (Note 16) 56,171 56,622 39,411 48,351 37,005 26,947Recovery of impairment losses (Note 15) (9,233) (35,943) (16,222) (28,151) (13,309) (8,658)Miscellaneous (Notes 28 and 31) 3,568,521 2,953,844 2,414,549 3,096,561 2,284,840 1,716,965

TOTAL OPERATING EXPENSES 10,006,907 8,619,609 6,811,447 9,101,689 7,130,060 5,381,444

INCOME BEFORE INCOME TAX 8,302,090 7,968,028 5,331,043 8,160,027 7,722,640 5,242,954

PROVISION FOR INCOME TAX (Note 28) 914,628 820,689 372,714 864,425 737,654 305,908

NET INCOME FROM CONTINUING OPERATIONS 7,387,462 7,147,339 4,958,329 7,295,602 6,984,986 4,937,046

DISCONTINUED OPERATIONSDiscontinued operations, net of tax (Note 13) 367,929 72,903 133,128 570,456 – –

NET INCOME P7,755,391 P7,220,242 P5,091,457 P7,866,058 P6,984,986 P4,937,046

ATTRIBUTABLE TO:Equity holders of the Parent Company (Note 36) P7,699,327 P7,163,738 P5,011,725Non-controlling interest 56,064 56,504 79,732

NET INCOME P7,755,391 P7,220,242 P5,091,457

Basic/Diluted Earnings Per Share (Note 36) P12.77 P11.88 P8.31

Basic/Diluted Earnings Per Share - Continuing Operations (Note 36) P12.25 P11.85 P8.23

Basic/Diluted Earnings Per Share - Discontinued Operations (Note 13) P0.52 P0.03 P0.08




Statements of Comprehensive Income


2015 2014 2013 2015 2014 2013(As Restated - Note 13)

(Amounts in Thousands)

NET INCOME FOR THE YEAR P7,755,391 P7,220,242 P5,091,457 P7,866,058 P6,984,986 P4,937,046

OTHER COMPREHENSIVE INCOME (LOSS)Other Comprehensive Income to be Reclassified to Profit or Loss

in Subsequent Periods:Cumulative translation adjustments 42,114 26,571 90,927 42,103 26,607 90,867Other Comprehensive Income (Loss) not to be Reclassified to

Profit or Loss in Subsequent Periods:Remeasurement gains (losses) on defined benefit plans (Note 29) (214,731) 73,859 (183,158) (208,489) 34,001 (168,099)Net unrealized gain (loss) on financial assets at fair value through

other comprehensive income, net of tax (Note 10) 9,730 6,763 (15,238) 8,948 6,510 (9,110)(205,001) 80,622 (198,396) (199,541) 40,511 (177,209)

OTHER COMPREHENSIVE INCOME (LOSS) FOR THE YEAR (162,887) 107,193 (107,469) (157,438) 67,118 (86,342)

TOTAL COMPREHENSIVE INCOME P7,592,504 P7,327,435 P4,983,988 P7,708,620 P7,052,104 P4,850,704

ATTRIBUTABLE TO:Equity holders of the Parent Company P7,536,393 P7,270,857 P4,904,252Non-controlling interest 56,111 56,578 79,736

P7,592,504 P7,327,435 P4,983,988


2 0 1 5 A n n u a l R e p o r t 49


Statements of Changes in Equity (G4-7)

ConsolidatedYears Ended December 31, 2015, 2014 and 2013

Equity Attributable to Equity Holders of the Parent Company

Capital Stock

(Note 26)

Stock Dividends

Distributable (Note 26)

Additional Paid-in Capital

Surplus Reserves (Note 26)

Surplus (Note 26)

Net Unrealized Gain on Financial Assets

at Fair Value through Other Comprehensive

Income (Note 10)

Net Unrealized Gain on Subsidiaries’ Financial

Assets at Fair Value through

Other Comprehensive Income (Note 10)

Cumulative Foreign Currency

Translation TotalNon-controlling

Interest Total Equity(Amounts in Thousands)

Balance at January 1, 2015 P6,088,594 P– P3,210,200 P487,771 P36,951,697 P41,930 P24,851 P76,246 P46,881,289 P1,075,750 P47,957,039Total comprehensive income for the year – – – – 7,484,563 14,128 (4,412) 42,114 7,536,393 56,111 7,592,504Transfers to surplus reserves – – – 4,956 (4,956) – − – – – –Discontinued operations (Note 13) – – – – – – − – – (1,103,160) (1,103,160)Deconsolidation of a subsidiary (Note 13) – – – – – – – – – (73) (73)Declaration of cash dividends – – – – (1,208,013) – − – (1,208,013) (23,500) (1,231,513)Balance at December 31, 2015 P6,088,594 P– P3,210,200 P492,727 P43,223,291 P56,058 P20,439 P118,360 P53,209,669 P5,128 P53,214,797Balance at January 1, 2014 P5,023,585 P1,004,717 P3,210,200 P395,690 P31,011,930 P35,420 P24,594 P49,675 P40,755,811 P1,019,172 P41,774,983Total comprehensive income for the year – – – – 7,237,519 6,510 257 26,571 7,270,857 56,578 7,327,435Transfers to surplus reserves – – – 92,081 (92,081) – – – – – –Distribution of stock dividends 1,004,726 (1,004,717) – – (9) – – – – – –Issuance of preferred shares 60,283 – – – – – – – 60,283 – 60,283Declaration of cash dividends – – – – (1,205,662) – – – (1,205,662) – (1,205,662)Balance at December 31, 2014 P6,088,594 P– P3,210,200 P487,771 P36,951,697 P41,930 P24,851 P76,246 P46,881,289 P1,075,750 P47,957,039Balance at January 1, 2013 P5,023,585 P– P3,210,200 P312,363 P28,266,149 P44,530 P40,701 (P41,252) P36,856,276 P939,436 P37,795,712Total comprehensive income for the year – – – – 4,828,552 (9,110) (6,117) 90,927 4,904,252 79,736 4,983,988Transfers to surplus reserves – – – 83,327 (83,327) – – – – – –Sale of financial assets at fair value through other

comprehensive income – – – – 9,990 – (9,990) – – – –Declaration of stock dividends – 1,004,717 – – (1,004,717) – – – – – –Declaration of cash dividends – – – – (1,004,717) – – – (1,004,717) – (1,004,717)Balance at December 31, 2013 P5,023,585 P1,004,717 P3,210,200 P395,690 P31,011,930 P35,420 P24,594 P49,675 P40,755,811 P1,019,172 P41,774,983

Parent CompanyYears Ended December 31, 2015, 2014 and 2013

Capital Stock

(Note 26)

Stock Dividends Distributable

(Note 26)Additional

Paid-in Capital


Surplus (Note 26)

Net Unrealized Gain on Financial Assets at Fair

Value through Other Comprehensive

Income (Note 10)

Cumulative Foreign

Currency Translation Total Equity

(Amounts in Thousands)Balance at January 1, 2015 P6,088,594 P– P3,236,905 P442,783 P36,148,929 P41,930 P76,229 P46,035,370Total comprehensive income for the year – – – – 7,657,569 8,948 42,103 7,708,620Transfers to surplus reserves – – – 20,200 (20,200) – – –Declaration of cash dividends – – – – (1,208,013) – – (1,208,013)Balance at December 31, 2015 P6,088,594 P– P3,236,905 P462,983 P42,578,285 P50,878 P118,332 P52,535,977Balance at January 1, 2014 P5,023,585 P1,004,717 P3,236,905 P355,400 P30,422,996 P35,420 P49,622 P40,128,645Total comprehensive income for the year – – – – 7,018,987 6,510 26,607 7,052,104Transfers to surplus reserves – – – 87,383 (87,383) – – –Distribution of stock dividends 1,004,726 (1,004,717) – – (9) – – –Issuance of preferred shares 60,283 – – – – – – 60,283Declaration of cash dividends – – – – (1,205,662) – – (1,205,662)Balance at December 31, 2014 P6,088,594 P– P3,236,905 P442,783 P36,148,929 P41,930 P76,229 P46,035,370Balance at January 1, 2013 P5,023,585 – P3,236,905 P277,300 P27,741,583 P44,530 (P41,245) P36,282,658Total comprehensive income for the year – – – – 4,768,947 (9,110) 90,867 4,850,704Transfers to surplus reserves – – – 78,100 (78,100) – – –Declaration of stock dividends – 1,004,717 – – (1,004,717) – – –Declaration of cash dividends – – – – (1,004,717) – – (1,004,717)Balance at December 31, 2013 P5,023,585 P1,004,717 P3,236,905 P355,400 P30,422,996 P35,420 P49,622 P40,128,645



ConsolidatedYears Ended December 31, 2015, 2014 and 2013

Equity Attributable to Equity Holders of the Parent Company

Capital Stock

(Note 26)

Stock Dividends

Distributable (Note 26)

Additional Paid-in Capital


Surplus (Note 26)

Net Unrealized Gain on Financial Assets

at Fair Value through Other Comprehensive

Income (Note 10)

Net Unrealized Gain on Subsidiaries’ Financial

Assets at Fair Value through

Other Comprehensive Income (Note 10)

Cumulative Foreign Currency

Translation TotalNon-controlling

Interest Total Equity(Amounts in Thousands)

Balance at January 1, 2015 P6,088,594 P– P3,210,200 P487,771 P36,951,697 P41,930 P24,851 P76,246 P46,881,289 P1,075,750 P47,957,039Total comprehensive income for the year – – – – 7,484,563 14,128 (4,412) 42,114 7,536,393 56,111 7,592,504Transfers to surplus reserves – – – 4,956 (4,956) – − – – – –Discontinued operations (Note 13) – – – – – – − – – (1,103,160) (1,103,160)Deconsolidation of a subsidiary (Note 13) – – – – – – – – – (73) (73)Declaration of cash dividends – – – – (1,208,013) – − – (1,208,013) (23,500) (1,231,513)Balance at December 31, 2015 P6,088,594 P– P3,210,200 P492,727 P43,223,291 P56,058 P20,439 P118,360 P53,209,669 P5,128 P53,214,797Balance at January 1, 2014 P5,023,585 P1,004,717 P3,210,200 P395,690 P31,011,930 P35,420 P24,594 P49,675 P40,755,811 P1,019,172 P41,774,983Total comprehensive income for the year – – – – 7,237,519 6,510 257 26,571 7,270,857 56,578 7,327,435Transfers to surplus reserves – – – 92,081 (92,081) – – – – – –Distribution of stock dividends 1,004,726 (1,004,717) – – (9) – – – – – –Issuance of preferred shares 60,283 – – – – – – – 60,283 – 60,283Declaration of cash dividends – – – – (1,205,662) – – – (1,205,662) – (1,205,662)Balance at December 31, 2014 P6,088,594 P– P3,210,200 P487,771 P36,951,697 P41,930 P24,851 P76,246 P46,881,289 P1,075,750 P47,957,039Balance at January 1, 2013 P5,023,585 P– P3,210,200 P312,363 P28,266,149 P44,530 P40,701 (P41,252) P36,856,276 P939,436 P37,795,712Total comprehensive income for the year – – – – 4,828,552 (9,110) (6,117) 90,927 4,904,252 79,736 4,983,988Transfers to surplus reserves – – – 83,327 (83,327) – – – – – –Sale of financial assets at fair value through other

comprehensive income – – – – 9,990 – (9,990) – – – –Declaration of stock dividends – 1,004,717 – – (1,004,717) – – – – – –Declaration of cash dividends – – – – (1,004,717) – – – (1,004,717) – (1,004,717)Balance at December 31, 2013 P5,023,585 P1,004,717 P3,210,200 P395,690 P31,011,930 P35,420 P24,594 P49,675 P40,755,811 P1,019,172 P41,774,983

Parent CompanyYears Ended December 31, 2015, 2014 and 2013

Capital Stock

(Note 26)

Stock Dividends Distributable

(Note 26)Additional

Paid-in Capital


Surplus (Note 26)

Net Unrealized Gain on Financial Assets at Fair

Value through Other Comprehensive

Income (Note 10)

Cumulative Foreign

Currency Translation Total Equity

(Amounts in Thousands)Balance at January 1, 2015 P6,088,594 P– P3,236,905 P442,783 P36,148,929 P41,930 P76,229 P46,035,370Total comprehensive income for the year – – – – 7,657,569 8,948 42,103 7,708,620Transfers to surplus reserves – – – 20,200 (20,200) – – –Declaration of cash dividends – – – – (1,208,013) – – (1,208,013)Balance at December 31, 2015 P6,088,594 P– P3,236,905 P462,983 P42,578,285 P50,878 P118,332 P52,535,977Balance at January 1, 2014 P5,023,585 P1,004,717 P3,236,905 P355,400 P30,422,996 P35,420 P49,622 P40,128,645Total comprehensive income for the year – – – – 7,018,987 6,510 26,607 7,052,104Transfers to surplus reserves – – – 87,383 (87,383) – – –Distribution of stock dividends 1,004,726 (1,004,717) – – (9) – – –Issuance of preferred shares 60,283 – – – – – – 60,283Declaration of cash dividends – – – – (1,205,662) – – (1,205,662)Balance at December 31, 2014 P6,088,594 P– P3,236,905 P442,783 P36,148,929 P41,930 P76,229 P46,035,370Balance at January 1, 2013 P5,023,585 – P3,236,905 P277,300 P27,741,583 P44,530 (P41,245) P36,282,658Total comprehensive income for the year – – – – 4,768,947 (9,110) 90,867 4,850,704Transfers to surplus reserves – – – 78,100 (78,100) – – –Declaration of stock dividends – 1,004,717 – – (1,004,717) – – –Declaration of cash dividends – – – – (1,004,717) – – (1,004,717)Balance at December 31, 2013 P5,023,585 P1,004,717 P3,236,905 P355,400 P30,422,996 P35,420 P49,622 P40,128,645


2 0 1 5 A n n u a l R e p o r t 51


Statements of Cash FlowsConsolidated Parent Company

Years Ended December 312015 2014 2013 2015 2014 2013

(As Restated - Note 13)(Amounts in Thousands)

CASH FLOWS FROM OPERATING ACTIVITIESIncome from continuing operations before income tax P8,302,090 P7,968,028 P5,331,043 P8,160,027 P7,722,640 P5,242,954Income from discontinued operations before income tax (Note 13) 468,958 121,154 180,620 676,756 – –Income before income tax 8,771,048 8,089,182 5,511,663 8,836,783 7,722,640 5,242,954Adjustments for: Gain on sale of investment securities at amortized cost

(Notes 8 and 11) (2,067,016) (3,079,540) (2,212,225) (2,067,016) (3,079,540) (2,212,225) Gain on reclassification of investment securities at

amortized cost to financial assets at fair value through profit or loss (Note 11) (625,926) − − (625,926) − −

Unrealized market valuation loss (gain) on financial instruments at fair value through profit or loss (Note 9) (454,843) 247,345 501,927 (454,843) 247,345 450,848

Depreciation and amortization (Note 14) 599,136 522,625 428,734 521,979 424,137 329,245 Profit from assets sold/exchanged (Notes 13, 14, 15 and 16) (147,662) (149,020) (197,292) (53,838) (54,867) (64,365) Provision for credit losses (Note 12) 628,208 790,065 128,118 616,013 626,146 10,410 Recovery of impairment losses (Note 15) (9,233) (35,943) (78,844) (28,151) (13,309) (8,658) Amortization of software costs (Note 16) 56,190 56,647 39,442 48,351 37,005 26,947 Amortization of transaction costs on Long-term

Negotiable Certificates of Deposit (LTNCD) (Note 17) 9,860 9,317 8,804 9,860 9,317 8,804 Amortization of transaction costs on subordinated

note (Note 22) 5,454 2,483 6,641 5,454 2,483 6,641 Amortization of transaction costs on notes payable (Note 21) 9,508 – – 9,508 – –

Gain on sale of a subsidiary (Notes 13 and 31) (413,969) – – (676,756) – –Loss on deconsolidation of a subsidiary (Note 13) – – – 5,927 – –Share in net income of a joint venture (Note 13) (22,859) (25,523) (18,389) – – –Changes in operating assets and liabilities:

Decrease (increase) in the amounts of: Financial assets at FVTPL (Note 9) 8,563,417 (7,777,822) 17,861,548 8,561,689 (7,846,134) 17,974,617 Loans and receivables (Note 12) (47,260,743) (29,584,803) (45,817,509) (47,814,510) (29,024,618) (40,170,695) Other assets (641,383) 195,991 301,165 (731,004) 3,188 131,452 Increase (decrease) in the amounts of: Deposit liabilities (Note 17) 42,703,811 40,853,192 63,565,836 42,270,534 39,299,663 62,560,893 Acceptances payable 47,785 (284,842) 282,409 47,785 (284,842) 282,409 Margin deposits and cash letters of credit 292,003 27,071 (183,691) 292,003 27,071 (183,691) Manager’s and certified checks outstanding 616,619 224,724 376,394 613,944 314,522 280,956

Increase (decrease) in the amounts of:Accrued interest, taxes and other expenses (Note 23) 802,960 610,931 (66,392) 837,768 558,438 (99,962)

Other liabilities (Note 24) 533,205 2,842,049 (628,655) 86,372 2,698,758 (585,365)Net cash generated from operations 11,995,570 13,534,129 39,809,684 10,311,926 11,667,403 43,981,215Income taxes paid (1,021,436) (1,119,569) (562,072) (883,189) (1,019,978) (470,161)Net cash provided by operating activities 10,974,134 12,414,560 39,247,612 9,428,737 10,647,425 43,511,054

CASH FLOWS FROM INVESTING ACTIVITIESAcquisitions of: Investment securities at amortized cost (134,940,378) (124,463,389) (71,680,042) (134,940,378) (124,466,774) (71,743,997) Property and equipment (Note 14) (927,018) (1,019,436) (1,036,850) (617,403) (888,283) (753,851) Software costs (Note 16) (123,791) (114,378) (29,937) (118,505) (94,011) (23,872) Branch licenses (Note 16) – (220,000) (480,000) − (220,000) (480,000)Proceeds from: Sale of a subsidiary (Note 13) 959,430 − − 1,600,000 − − Assumption of net liabilities of a subsidiary (Note 13) − − − 1,522,124 − − Sale/maturities of investment securities at amortized cost 54,670,548 104,572,527 35,274,329 54,321,408 104,572,527 35,274,329 Disposal of investment properties 195,163 147,902 250,792 109,530 123,222 144,265 Disposal of property and equipment 125,403 101,169 277,874 86,030 73,959 32,608 Sale of financial assets at fair value through other

comprehensive income – – 15,674 – – –Net cash used in investing activities (80,040,643) (20,995,605) (37,408,160) (78,037,194) (20,899,360) (37,550,518)(Forward)



2015 2014 2013 2015 2014 2013(As Restated - Note 13)

(Amounts in Thousands)CASH FLOWS FROM FINANCING ACTIVITIESProceeds from bills payable and securities sold under repurchase

agreements P6,089,608,306 P4,904,119,261 P3,111,469,036 P6,159,749,966 P4,903,041,268 P3,110,722,849Settlements of bills payable and securities sold under

repurchase agreements (6,019,107,646) (4,914,630,673) (3,086,334,438) (6,089,131,306) (4,913,670,633) (3,085,439,064)Proceeds from issuance of notes payable (Note 21) 13,166,023 – – 13,166,023 – –Proceeds from issuance of subordinated note (Note 22) – 9,931,008 – – 9,931,008 –Settlement of subordinated note (Note 22) – – (3,000,000) – – (3,000,000)Proceeds from issuance of preferred shares (Note 26) – 60,283 – – 60,283 –Cash dividends paid (Note 26) (1,228,434) (1,204,698) (1,001,342) (1,204,934) (1,204,698) (1,001,342)Net cash provided by (used in) financing activities 82,438,249 (1,724,819) 21,133,256 82,579,749 (1,842,772) 21,282,443Effect of exchange rate differences 929,261 26,571 90,927 929,250 26,606 90,867

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 14,301,001 (10,279,293) 23,063,635 14,900,542 (12,068,101) 27,333,846

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEARCash and other cash items 5,619,751 4,428,863 3,372,558 5,307,008 4,196,521 3,184,189Due from Bangko Sentral ng Pilipinas 35,843,596 45,583,991 21,779,290 34,671,149 45,129,263 18,094,655Due from other banks 39,129,595 28,739,381 25,406,752 39,047,042 28,677,516 25,230,610Interbank loans receivable and securities purchased under resale agreements with the Bangko Sentral ng Pilipinas – 12,120,000 17,250,000 – 13,090,000 17,250,000

80,592,942 90,872,235 67,808,600 79,025,199 91,093,300 63,759,454

CASH AND CASH EQUIVALENTS AT END OF YEAR (Note 37)Cash and other cash items 6,646,264 5,619,751 4,428,863 6,646,157 5,307,008 4,196,521Due from Bangko Sentral ng Pilipinas 56,882,313 35,843,596 45,583,991 55,989,081 34,671,149 45,129,263Due from other banks 31,365,366 39,129,595 28,739,381 31,290,503 39,047,042 28,677,516Interbank loans receivable and securities purchased under resale agreements with the Bangko Sentral ng Pilipinas – – 12,120,000 – – 13,090,000

P94,893,943 P80,592,942 P90,872,235 P93,925,741 P79,025,199 P91,093,300

OPERATIONAL CASH FLOWS FROM INTEREST AND DIVIDENDS

Interest received P16,993,896 P14,399,926 P11,616,745 P16,546,546 P13,338,188 P10,867,786Interest paid 5,510,256 3,858,993 3,942,287 5,432,857 3,709,417 3,805,612Dividends received 17,062 16,557 19,045 42,442 14,924 17,501


2 0 1 5 A n n u a l R e p o r t 53

EXECUTIVE MANAGEMENT

Alfonso L. Salcedo, JrPresident & Chief Executive Officer

Anastasia Y. DyExecutive Director

Eduardo M. OlbesExecutive Vice PresidentWholesale Banking Segment

Ma. Cristina A. TingsonExecutive Vice PresidentRetail Banking Segment

Joselito E. MapeExecutive Vice PresidentChief Financial Officer

Belen C. LimExecutive Vice PresidentCorporate Services Group

Raul Martin A. PedroExecutive Vice PresidentTreasurer


SENIOR VICE PRESIDENTS

Jason T. Ang

Leslie Y. Cham

Jorge Lindley S. Ong Cecilio Frederick M. Pusag

Daniel U. Yu

Jeanette S. KehMaria Concepcion P. Cruz

Orencio André P. Ibarra III

Maria Teresa C. Ogbinar

Melissa R. Aquino Mariza E. Arcilla

Gina S. Go

Belen W. Au Ronald I. Austria

2 0 1 5 A n n u a l R e p o r t 55

FIRST VICE PRESIDENTS

Imelda Marie A. Amora

Bee Bee S. Chua

Irahlyn S. Lariba

Joyce L. So

Delbert S. Ang It

Helen L. Chua

Lorenzo Sixto T. Lichauco

Zenaida L. Tan

John Francis B. Angeles

Eduardo C. Cortes

Loretta G. Mangilit

Ma. Patricia N. Tan

Mylene G. Buencamino

Dante T. Fuentes

Maria Margarita R. Mirabueno

Carol P. Warner

Abigail Marie D. Casanova

Ma. Paz Victoria R. Gonzalez

Zenaida A. Ong

Simeon T. Yap

Marlette P. Brodett

Dennis Joy B. Ejercito

Yvonne Joanna P. Marcelo

Ricardo G. Torres


SUBSIDIARIES MANAGEMENT

Lolito Ramon A. Cerrer, Jr.

SB Capital Investment Corporation

Emilio Federico C. Galang IIIPresident

Gerald K. AbrogarDirector

Joy V. SupanDirector

SB Cards Corporation

Ma. Cristina A. TingsonPresident

Catalina E. PapaFirst Vice President

Cristina V. Henson

Noel S. Reyes

SB Equities, Inc.

Warren T. SyPresident

Poch Edward I. ZamoraManaging Director

SBM Leasing, Inc.

Angelito Miguel A. De LeonPresident

SB Rental Corporation

Bernadette P. AstudilloPresident

Security Bank Savings

Gina S. GoPresident

57 2 0 1 5 A n n u a l R e p o r t

Sustainability Report

BUILDING THE BUSINESSBUILDING THE NATIONSecurity Bank Foundation, Inc. (SBFI) collaborated with illustrator and art director Daniel

Tingcungco for the arc design of the Paseo-Ayala underpass. This project sought to improve

the pedestrian experience in the Central Business District in partnership with the Makati

Commercial Estate Administration (MACEA) .

The artist used the theme “Rocket Launcher” to interpret Security Bank’s role in opening

opportunities for people to fulfil their goals in life. The artwork used bold colors to evoke the

energy associated with youthful potential and featured students bouncing off into space to

reach for their dreams. The mural was executed with a combination of paint and 3D digital

prints showcasing a pastel-like, textured effect.


“Security Bank Foundation’s dedication to

provide a brighter future for people through

its sustainability and scholarship programs

gave me inspiration to show Security Bank

Corporation as a ‘rocket-launcher’ for these

students to reach for the stars and achieve

their dreams. My space-themed design

symbolizes these aspects and will hopefully

fascinate and inspire people as they pass

through the underpass.”

BUILDING THE BUSINESSBUILDING THE NATION

Daniel TingcungcoArtist / Illustrator

59 2 0 1 5 A n n u a l R e p o r t


BetterBanking is Sustainable Banking (G4-18, G4-28, G4-29, G4-30)

Earnest advocates know that sustainability is transformative

business leadership. It is leadership with the capacity to

endure and succeed into the future – achieved through

innovative thinking that will truly meet the needs of

the present without compromising the ability of future

generations to meet their own needs.

Security Bank is committed to the principles of sustainable

banking and considers sustainability as one of the key

elements for growth and future-proofing of the organization.

We recognize the challenge of sustainability in our industry,

and we are aware of the need for businesses all over the

world to be accountable for their impact on society.

That is why our sustainability strategy is founded on

our brand promise of BetterBanking, with the goal of

contributing to the betterment of all our stakeholders and

the long-term development of the communities where we do

business. Our sustainability strategy is weaved into how we

do business, into how we do BetterBanking.

We began reporting on our sustainability performance in

2013 when we promised to keep improving and continue

engaging with our stakeholders in an effort to know more and

understand deeply their concerns and thus be equipped with

information on how to work together even more effectively.

Aside from actively listening to our clients and engaging

them in productive conversation about their needs, Security

Bank Foundation, Inc. has been zealously seeking ways and

means for our organization to effectively reach out and bring

positive change to as many people as possible.

This report, which covers the period 01 January 2015 to

31 December 2015 and was prepared in accordance with

the Global Reporting Initiatives (GRI) G4 guidelines, aims

to showcase positive strides towards our considerable

objectives. Following these guidelines ensures that our

report is easy to compare with those of other GRI-compliant

companies around the world.

DIVIDEND POLICY

Security Bank declares and pays out dividends from the

earned surplus or net profits of the Bank as often and

at such times as the Board of Directors may determine

and in accordance with the provisions of law and the

regulations of the BSP. The Bank adheres to a Board-

approved Dividend Policy whose fundamental and

overriding principle is sustainability. The Dividend Policy

aims to ensure compliance with regulatory capital

requirements, maintain strong credit ratings and maintain

healthy capital ratios to support business and maximize

shareholder value. Capital structure is managed in the light

of changes in economic conditions, risk characteristics of

activities and assessment of prospective business directions.

Capital management begins with an assessment of

regulatory capital and capital adequacy, followed by the

determination of the optimal capital structure based

on a risk-based capital planning approach, taking into

consideration risk appetite, risk exposures, provision

of a capital buffer, capital mix, leverage, target ROE,

opportunities in the capital markets and sustainability.


HOW WE ENGAGE WITH OUR STAKEHOLDERS (G4-24, G4-25, G4-26, G4-27)

Stakeholders Mode of engagement Frequency Concern/Expectations Response

Media Press ReleasePersonal InterviewsOfficial Media StatementsPublic AdvisoriesPress Conferences

As Necessary Product brief/detailsTransparencyFactual InformationTimely release of announcements

Availability of spokesperson Media events Press kitsFact sheetsMarket information

Customers Call CenterWebsiteRelationship Teams

As Necessary Accessibility & convenience Account SecuritySpeedy servicesBetter benefitsFinancial Advice

Branch expansionBetter customer services

Partners Corporate events/forumsYearly bonuses

As Necessary Transparency in disclosuresAlignment of advocacies

Regular disclosure of overall performance

Suppliers Accreditation ProcessAnnual Meetings with security agencies

Once a year Transparency in accreditation Integrity of bidsTimeliness of payments

Clear & transparent accreditation criteria Audited bidding process

Local Communities

CSR/Foundation ProgramsCommunity meetings during the projects

As Necessary Socio-Economic development of the communitiesProvide education

Implementation of CSR Programs by SB Foundation

Shareholders/Investors

Annual Stockholders’ meetingGeneral Board MeetingOne-on-One Investor meetingSpecial road shows/conferences

AnnualAnnualOn DemandMonthly/ Quarterly

Higher Financial ReturnsMinimum Risks related to business & expansion

Stable dividendsRegular disclosure of financial performance Investment outlets

LGU/Regulators Annual/Quarterly ReportsAuditsTaxes/Certification Processes

As Necessary Inaccurate disclosures Non-compliance with standards

Timely & accurate release of reportsStrict compliance with regulatory norms

Industry Associations

Regular Industry meetings As Scheduled Sharing of industry standards and best practices

Regular update of industry outlook and standards

Employees Employee Engagement programs

As Needed Focus on work-life balance Annual Family Day/Christmas PartyService Tenure AwardsCSR/Environmental volunteer activities

Stockholders data: Last Three Years (2013 to 2015) 2015 2014 2013

Earnings per share 12.76 11.87 8.31

Cash dividends declared (PMn) - common & preferred 1,208 1,206 1,005

Cash dividends per common share 2.00 2.00 2.00

Cash dividends per preferred share 0.0039 - -

Stock dividends paid (PMn) - 20% -

Book value per share 88.17 77.67 67.61

Economic Impact

For the Year (in Php Million) 2015 % of Total 2014 % of Total

Salaries Paid to Employees 3,091 32% 2,619 32%

Taxes Paid to the Government 2,363 24% 2,135 26%

Amount Paid to Suppliers and Contractors 3,008 31% 2,269 27%

Dividends Paid to Stockholders (Common & Preferred) 1,208 12% 1,206 15%

Charitable Contributions of SB Foundation Inc. 71 1% 54 1%

Total 9,741 100% 8,283 100%

61 2 0 1 5 A n n u a l R e p o r t

KEY SUSTAINABILITY ASPECTS WHICH ARE MATERIAL TO OUR OPERATIONS (G4-19)

The key material aspects of Economic, Environmental and Social parameters that we have

identified as critical to our business and our sustainability strategy are the following:


Key ConcernsRelevant Specific disclosures from

GRI G4

Balancing Revenue with Cost & Risk EC1, EC2

Pricing of loans according to risks EC7, EC8

Impact of Investments EC7, EC8

Economic


GRI G4

Compliance of borrowers with environmental standards EN 32

Energy Consumption in the facilities EN 3 – EN 7

Water Consumption in the facilities EN 8 – EN 10

GHG Emissions EN 15 – EN 21

Solid Waste Generated (IT, Paper & Wood) EN 23

Compliance of SBC with environmental standards EN 29

Environment

Social


GRI G4

Safe Working environment for employees HR3 – HR 7,

Client information security/privacy PR8

Transparency of Products & Services and customer feedback PR3 – PR5, PR7

Compliance SO8, PR9

Anti-Corruption SO3 – SO5

Community Engagement Programs SO1 – SO2

Labor Practices & Employee Relations LA 1 – LA 4, LA 9 – LA 13


As the economic performance of the Bank for the past year has

been discussed comprehensively in the previous parts of this

Annual Report, we want only to emphasize that our economic

gains were achieved on the back of uncompromising corporate

governance and regulatory compliance.

For us, transparency and collaboration are sources of

competitive advantage in an ever-changing business

landscape.

Our policy on corporate governance states our fundamental

belief that good corporate governance and transparency

are fundamental to achieving our vision of becoming one of

the top five universal banks in the country. BetterBanking is

how we strive for excellence in all aspects of our business –

our products and services, our reporting and disclosures to

regulators, shareholders and the public, our ethics and our

environmental choices.

Ensuring the effectiveness of our corporate governance

and risk management systems is a priority task every day

as we manage our business for the long-term. As our

economic performance shows our ability to make efficient

use of capital, it also demonstrates that we are able to show

resiliency by making an impact on the lives of our sustainable

clientele – healthy, productive communities that meet real

needs of society.

With BetterBanking, we are actively and consciously building

valuable long-term relationships with our clients by working

hand in hand in developing innovative ways of meeting their

banking needs.

Economic Sustainability

Better at Growing Long-Term Relationships

Environmental Sustainability

A Better Planet for All It is our privilege to be welcomed in the many communities

and neighborhoods where we do business. We have a total

of 262 branches and 555 ATMs all over the country as of

end-December 2015. More branches will be opened in

strategic locations nationwide as the Bank widens its retail

distribution network.

As we have continued on our growth path, we have also

kept a steady watch on our energy footprint and have

continued to closely monitor and take steps to effectively

manage water, electricity and fuel consumption in the

conduct of our business.

TOTAL AREA(In sq.m)

SBS Center

SBC Cards Head Office

SBC Branches

Security Bank Head Office

24,444

3,589

4,001

55,527

63 2 0 1 5 A n n u a l R e p o r t

REDUCING HCFC CONSUMPTION (G4-EN23, G4-DMA)

In line with the thrust of the Department of Environment and

Natural Resources (DENR) to limit the use of ozone-depleting

Hydrochloroflourocarbon (HCFC) in the country, we are also

actively seeking solutions to reduce, if not finally eliminate

the use of R-22 Freon traditionally used in air conditioning

systems.

ENERGY EFFICIENCY (G4-EN3, G4-EN5, G4-DMA)

This year, energy-efficient and eco-friendly Inverter

Type air conditioning units (ACU) – which use the

refrigerant R-410a – have been deployed for all newly

renovated and constructed branches. This refrigerant is

a Hydroflourocarbon (HFC), minus the additional chlorine

component in HCFC that affects the ozone layer of

the earth. R-410a is said to have zero ozone depletion

potential.

Aside from installations in new and renovated branches,

defective ACUs in existing branches were replaced with the

new Inverter Type ACUs as well.

We have conducted a monitoring study on our Valle Verde

branch to help provide us with reliable metrics. Our study

has provided empirical data showing that the change to

inverter technology produced an effective 20% savings in

electricity, both in consumption and billing.

In theory, with an assumption of an average 20% savings,

Security Bank can potentially save P13 million annually if

all ACUs in all its offices and branches are replaced with

inverter type ACU. In terms of supply chain issues, the

Bank will no longer worry about being dependent on

R-22 Freon which will be subject to restricted supply by

government regulators in the coming years.

And equally notable, with R-410a and inverter technology, the

Bank will be able to minimize its impact on the ozone layer.

Nineteen branches are now using this inverter technology,

utilizing 27 units, and we see this as setting a new standard

for our eco-efficiency in building maintenance. The Bank

will continue exploring and studying ways to use new

technologies to improve efficiencies for the betterment of

our environment.


Total Consumption (MJ)

2013 2014 2015

Head Office 19,511,100 17,646,300 15,586,200

SBS Center 1,457,064 1,621,582 1,685,274

SBCards HO 3,878,280 3,812,400 3,796,200

SBC Branches 23,329,168 20,041,472 27,830,811

Energy Intensity(MJ/sq.m)

Head Office 798 722 638

SBS Center 406 452 470

SBCards HO 969 953 949

SBC Branches 484 416 490

Electricity

Total Consumption (cu.M)

2013 2014 2015

Head Office 44,022 34,812 35,891

SBS Center 1,700 1,820 1,947

SBCards HO 5,742 6,407 6,990

SBC Branches 78,954 82,752 78,556

Water (G4-EN8, G4-DMA)

Fuel

Total Consumption (Liters)

2013 2014 2015

Head Office 10,760 27,606 1,514

SBC Branches 18,180 21,792 18,862


2014 Total Consumption (KWH)

Total Billing (Peso)

July 3,592 38,310

August 4,356 43,794

September 4,869 43,723

Average 4,272 41,942

2015 Total Consumption (KWH)


July 4,129 34,634

August 4,177 33,717

September 4,126 29,937

Average 4,144 32,763

Power Consumption

Power Consumption

VALLE VERDE

Month Total Consumption (KWH)


January 3,657 34,458.95

February 4,343 42,557.43

March 4,192 41,157.48

April 4,603 43,509.53

May 5,006 44,138.92

June 5,102 41,237.62

Average 4,483 41,176.66

July 4,129 34,634.02

August 4,177 33,717.29

September 4,126 29,937.91

October 3,905 28,303.38

November 4,148 30,382.01

December 3,780 29,721.45

Average 4,044 31,116.01

TOTAL (2015) 51,168 433,755.99

Power Consumption

VALLE VERDE

Conventional ACU

Inverter ACUCONTRIBUTING TO THE GREENING PROGRAM (G4-EN13)

Since 2013, we have continued to support the government’s

National Greening Program by organizing tree-planting

activities together with employee volunteers.

The site chosen for 2015 was the Mt. Makiling Forest Reserve

in Sto.Tomas, Batangas, an ASEAN Heritage Park under

the jurisdiction of the University of the Philippines – Los

Baños and managed by the Makiling Center for Mountain

Ecosystems (MCME). Through the MCME, the park helps

to generate scientific knowledge for the conservation and

sustainable development of tropical mountain ecosystems.

An enthusiastic group of 160 Security Bank employee

volunteers from Metro Manila, Batangas and Laguna

branches joined the activity and helped plant 2,000 Fire Tree

seedlings.

In total, about 5,250 seedlings of Atis, Guava, Narra,

Mahogany, Camachile and Fire Trees have been planted since

2013 through this initiative – reaching communities such as

Pililla in Rizal, Calamba and San Pedro in Laguna.

Savings generated from using Inverter ACU24.43%

PILOT STUDY:

65 2 0 1 5 A n n u a l R e p o r t

2013 2014 2015

Male 1140 1327 1385

Female 2453 2687 2943

Total 3593 4014 4328

Gender Wise Distribution Regular Employees (G4-10)


Social Sustainability

Developing a Better Work Environment (G4-LA1, G4-DMA)

Our people remain our most valued resource, the driver of

our continued success. Along with our shareholders and

management, our employees are vital pillars that sustain and

strengthen our promise of BetterBanking.

For 2015, we have on record a total 4,328 employees, about

34.7% of whom are union members. The amicable conclusion

this year of the Collective Bargaining Agreement (CBA) for

2014-2016 with the Security Bank Employees’ Union (SBEU-

PTGWO) demonstrates the foundation of mutual respect that

keeps our Security Bank family strong. We take earnest steps to

ensure that the healthy and harmonious employee relations will

only keep getting better.

Our Security Bank family has been steadily growing alongside

operations, increasing by about 7.8% in total. The largest

increase comes from the Mindanao Region where we have

grown by around 21.6% in terms of manpower from last year.

Through the years, the female staff has kept a steady

majority percentage of around 68% of our total population,

about 10.5% of whom occupy a Senior Management rank,

up from 6.4% last year. Of the male staff population, about

14.2% of them occupy a Senior Management rank, up from

8.4% last year.

In terms of absolute numbers, 309 of 506 Senior Management

positions (or 61%) were occupied by women this year. Employees

4,328(G4-10)


Total Number of Employees

Total Number of Employees under CBA

Percentage

4328 1503 34.7

(G4-11)

The Security Bank family has grown from 4,014 in 2014

to 4,328 in 2015, of which 1,385 are male and 2,943 are

female.

While the increase in the number of employees is evident

in all three regions, Mindanao has had the largest growth

from 268 to 326 this year, equivalent to a 21.6% increase

in manpower. Most of the employees are located in Luzon

which comprises 87% of the total number of employees

nationwide.

The most number of male and female employees belong to

the <20-40 age group comprising around 24% and 55%

respectively, of the total number of employees nationwide.

Around 21% of Senior and Middle Management positions

are occupied by male employees,while 41% are occupied by

female employees.

The number of new hires has gone up by 37% from last year

with most of the new hires in the age bracket of <20-30.

67 2 0 1 5 A n n u a l R e p o r t


SBC ACADEMY (G4-LA9, G4-DMA)

Launched in 2014, the SBC Academy continued to provide

programs that would equip Security Bankers with relevant

trainings that support our BetterBanking campaign. In

2015, the Academy ran programs designed to upgrade

competencies in technical, sales, customer service, as well

as behavioral and leadership skills that offer employees

professional and personal growth to fuel their career

advancement.

security standards required of the banking industry. Through

our Security Department, we regularly issue company-wide

bulletins to keep our employees abreast of news and updates

on any safety issues in the workplace, enjoining everyone to

stay alert and always be prepared.

2013 2014 2015

Total no. of Participants 15,554 13,014 15,310 Total Training Hours 78,208 192,504 193,318 Ave. Training Days per employee 3.3 6.3 5.5

WORKPLACE SAFETY AND SECURITY (G4-LA8,G4-DMA)

In response to this year’s alarming emergent issue of safety

and security in the country as heralded by government

reports on geohazards as well as climate change effects,

we have organized an Occupational Safety and Health

Committee tasked to spearhead initiatives to address

employee safety and health concerns. The Committee is

composed of the Corporate Human Resources Group Head

(Chairman), Branch Banking Operations Deputy Group

Head, Branch Banking Group Head, Human Resources

Development Division Head, General Services Division

Head, Customer Contact Group Head and two Union

representatives. The Committee’s Secretariat is the Security

Department Head.

The Bank gave utmost cooperation to the Metro Manila

Development Authority (MMDA) for its Metro-wide Shake

Drill in July 2015. Affected branches also participated

and followed MMDA’s instruction to practice their

recommended “duck, cover and hold” strategy.

The Bank also participated in the Barangay Emergency

Evacuation Plan (BEEP) Drill organized by the Makati City

government as part of its CDRMC Disaster Resiliency Program

held in September 2015.

We continue to work closely with local governments

wherever we conduct business and adhere to all

regulations, especially those pertaining to the high-level

HEALTH AND WELLNESSThe Bank also makes an effort to communicate timely

health advisories to employees. Health advisories released

for 2015 covered conditions such as hepatitis, heart attack,

dysmenorrhea, heat stroke, asthma, dengue, Mers-Cov virus,

tuberculosis and sore eyes.

In 2015, the Bank began extending its health maintenance

coverage to our employees’ qualified dependents to afford

them the benefit of free hospitalization and outpatient

consultations. Also held in 2015 was a Health and Wellness

Fair, which featured free health checks and medical

consultations and laboratory tests for employees.

As prevention is our health and wellness strategy, we continued

our annual flu vaccination program, which extends lower-than-

market rates to employees and their dependents. 750 people

availed of the program in 2015.


§The Resource Mobilization Campaign, which gathers

donations for school materials, and which this year was able

to donate 3,500 school bags with supplies to students of

Tañong Integrated School and Tañong Elementary School Unit

1 in Malabon and Bagumbayan Elementary School in Navotas;

§The School Painting Outreach Activity at Inchican Elementary

School in Silang, Cavite that attracted 55 volunteers from

Head Office and Metro Manila branches; and

§The School Painting Outreach Activity at Banga High School in

Plaridel, Bulacan that attracted 80 volunteers from branches in

Metro Manila, San Fernando and Bulacan;

§The Thanksgiving Outreach Activity with the children of

garbage pickers from Tondo, Manila assisted by the Philippine

Christian Foundation attracted 55 volunteers.

The in-house gym and Zumba classes at the Head Office were

also part of our prevention strategy, encouraging everyone

to exercise and make fitness a habit. In addition, Security

Bank partnered with fitness centers such as Urban Ashram,

Options Studio, Fitness First, 360 Degrees Fitness Club, Gold’s

Gym and Functional Fitness for discounted membership fees.

Sports activities were pushed in 2015 as try-outs were held for

badminton, bowling and volleyball clubs. More sports activities

are planned for 2016.

WORK-LIFE BALANCE AND VOLUNTEERISMCaring for the whole person, Security Bank believes it is

important not only to support career advancement for its

employees but also to advocate for a meaningful quality of life.

One concrete example is helping to grow our employees’

musical talent. With the continued support for the SBC

Chorale, the Bank champions artistic and creative expression.

The SBC Chorale has been the Bank’s exemplary representative

in every inter-bank chorale competition through the years. The

choir also regularly sings for the lunchtime Masses in the Head

Office, as well as in every special occasion of the Bank.

Encouraging spirituality is also a way that the Bank advocates

a meaningful life. The Bank sponsors Catholic Masses every

Wednesday, first Friday, and feasts of saints. Employees who

want to organize Bible study sessions are allowed to gather

within bank premises during lunch break or after office hours.

Cultivating the spirit of volunteerism is another way. By

providing opportunities for employees to volunteer, the

Bank demonstrates that sharing of the self to others makes

for a fuller life. In 2015, there were a host of projects that

promoted volunteerism, such as:

§The tree-planting activity in Mt. Makiling which attracted

160 volunteers;

§The Blood Donation Drive, in partnership with St. Luke’s

Medical Center, that yielded 145 30cc bags of life-saving

blood;

§The Regalo Mo, Kinabukasan Ko program, which pools

employee donation for an educational fund for the benefit of

the children of Security Bank Group Agency staff;

RECOGNIZING BETTERBANKING EXEMPLARSWe are deeply proud of how our employees have delivered

our promise of a BetterBanking experience to clients. In 2015,

seven employees were conferred the Outstanding Security

Banker Milestones and Achievement (OSAM) Award. The

award recognizes employees for their adherence to the Bank’s

core values, for being employee engagement champions, and

for being exemplars of excellence in their respective fields of

expertise.

The year 2015 also saw the start of our SBC Compliments

Program, an employee recognition program that honors

exemplary service to internal and external clients. Winners

received an Award certificate and token prizes such as gift

certificates from Starbucks, Krispy Kreme and other surprises.

This is a non-monetary rewards program that helps our people

see that their efforts are appreciated and valued, providing

BetterBanking experience not only to clients but to Bank

employees as well.

over

1,000 Employee Volunteers since 2010

over

5,000 Seedlings Planted

since 2013

4,000 Man-hours Volunteered

69 2 0 1 5 A n n u a l R e p o r t


Corporate Social Responsibility

Building a Better Community (G4-S01, G4-S02, G4-DMA)

A key aspect of social sustainability is Corporate Social

Responsibility. This is where the Security Bank Foundation

Inc. (SBFI) takes the lead, with a strategic plan that covers the

main concerns that the Bank wants to address – education

and livelihood.

The Foundation’s holistic approach to its education advocacy

is four-pronged:

First, the Foundation sponsors a nationwide Scholarship

Program to provide educational assistance to disadvantaged

but deserving students.

For School Year 2015-2016, the Foundation provided support

to 313 student scholars in elementary, high school and college/

vocational and technical courses. One hundred eighteen of

those scholars are children of SBC agency personnel.

Second, the Foundation sponsors Student Excellence Awards, a

recognition program for graduating students of business-related

courses with outstanding scholastic leadership performance.

This year, the cash reward of P50,000 along with a plaque of

recognition have each been received by 13 awardees from

our partner schools.

Since we started in 2007, we have recognized over 70 top

graduating students from our partner schools which includes

Ateneo de Manila University, University of the Philippines

Year Number of Students supported

2015 313

2014 385

2013 285

Diliman, University of Sto. Tomas, Centro Escolar University,

Lyceum University of the Philippines, Siliman University, San

Beda College and De La Salle University.

Third, SBFI builds classrooms and provides needed educational

facilities and materials through its “Build a School, Build a

Nation: The Classrooms Project” which started in 2011. In

2015, the Foundation has turned over 78 classrooms to 12

public schools in various cities and provinces, namely: Bacolod

City and Silay City in Negros Occidental, Tacloban City and

Ormoc City in Leyte, Tagbilaran City in Bohol, Lipa City in

Batangas, Sta. Rosa City in Laguna and Silang, in Cavite.

Another 28 classrooms for four public schools in Tacloban,

Roxas, Plaridel, Balanga and Dagupan have been completed

by end-2015 and are expected to be turned over by first

quarter of 2016.

Luzon Visayas Mindanao Total

Kinder 24 14 4 42

Elem 24 68 31 123

HS 40 32 4 76

Total 88 114 39 241


241 no. of classrooms financed

over

600 individual scholars supported since 1994

over

70 student excellence awards with P3.5 million cash awards since 2007

over

7,000 school bags donated to public school children since 2013

over

20,000-24,000 no. of student beneficiaries per school year

To date, the Foundation has funded the construction

of 241 classrooms – 199 of which were completed

and formally turned over to recipient schools. The

beneficiaries of these classrooms are 55 public schools

in 31 cities and municipalities nationwide. These

classrooms are seen to benefit some 20,000 to 24,000

students every school year.

SBFI plans to further step up the Classroom Project,

aiming to construct an additional 136 classrooms for 21

public schools in Luzon and Mindanao regions in 2016.

Aside from classrooms, SBFI’s donations of educational

materials are made in support of initiatives by other

organizations that are as passionate in bringing quality

education to the needy. This year’s donations include:

§Three units of desktop computers to Burol Elementary

School in Dasmariñas, Cavite;

§School supplies for DepEd’s Alternative Learning System

(ALS) program offered for the New Bilibid Prison inmates;

§Reference materials for the AgriVet Institute of De La Salle-

Araneta University;

§A laptop, an LCD Projector and screen to the Catholic

Educational Association of the Philippines (CEAP), Inc. for

its training schools;

§300 armchairs and 2 units of desktop computers for San

Jose Central School in Tacloban City, Leyte.

(G4-EC8, G4-EC7, G4-DMA)

71 2 0 1 5 A n n u a l R e p o r t


Fourth, SBFI sponsors teachers’ training in support of the

continuous skills development of those in the teaching

profession.

In partnership with the Ateneo Center for Educational

Development (ACED), the Foundation sponsored two

major events: a four-day Trainors’ Training on Elementary

English for 50 public school teachers from the Bicol and

Visayas regions held in Lahug, Cebu City and another

four-day Teachers’ Training in Elementary English and

Mathematics for 100 public school teachers from the

Mindanao region held in Ateneo de Davao University.

LIVELIHOOD AND ENTREPRENEURSHIPAside from quality education, we believe that livelihood

empowers people to take charge of their own family

finances and begin their own strategies for sustainability in

the face of challenging times.

In 2015, SBFI continued to promote entrepreneurship to

Security Bank employees, agency personnel and their relatives

as a path to financial freedom. Partnering with the Tany

Foundation, SBFI provided the following livelihood trainings:

Summer Merienda Paninda Skills, Cooking Workshop,

Christmas Goodies Workshop and Reflexology. A total of 78

participants took the opportunity and learned how to prepare

siomai, barbeque, okoy, rice cakes, cassava cakes, graham

balls, brownies, coconut macaroons and fruit tarts – products

they can make and sell for additional income.

By patronizing Security Bank

products and services, customers

support SBFI’s advocacies because

0.5% to 1% of the Bank’s net income

is used to fund the Foundation’s

programs and activities every year.


Security Bank Corporation advocates empowering women and honoring their role in building a better society. The ‘8 Bravo Empowered Women’ Awards give recognition to Filipinas who demonstrate unwavering commitment to leadership and service, enabling themselves and others toward economic and social progress.

Three winners featured below have made significant contributions in their respective fields and continue to help create a better life and future for the nation.

Women Empowerment Helps Build a Better Society

RUTH CALLANTABravo Woman for Social Services Founder and President of Center for Community Transformation (CCT). She uses a development model that combines, in a sustainable manner, spiritual nurturing and economic and social interventions to poor communities. To date, she has transformed the lives of 100,000 urban poor families nationwide.

DRA. JACQUELINE DOMINGUEZBravo Woman for Science and Technology Head at the Memory Center of St. Luke’s Medical Center – Global City, she is a doctor specializing in Internal Medicine and Adult Neurology. She goes beyond the call of duty and involves herself in researches and outreach programs in poor communities of Marikina to minimize the effects of Alzheimer’s and Dementia.

RAQUEL CHOA Bravo Woman for Business A self-made entrepreneur who started from humble beginnings, she now owns a chocolate business named Ralfe Gourmet–a Cebu-based artisan Chocolate boutique as well as her own cacao plantation in Cebu. She has made innovations and new creations out of the Philippine tablea, unleashing the potentials of the product in local and international markets.

PRC has earmarked the donation for the purchase of an

ambulance unit to be used for its emergency response

and medical missions. The ambulance will be fitted with

state-of-the-art equipment and will aid PRC in saving and

protecting the lives of citizens.

PHILIPPINE RED CROSS DONATIONRecent events in the past years have shown the

importance of helping each other through tough times.

We have seen the dedication and commitment of the

Philippine Red Cross (PRC) to always be there for every

Filipino whenever disaster strikes. In 2015, in order to

contribute more to its worthy advocacies, the Foundation

donated P1.8 Million to the Philippine Red Cross.

73 2 0 1 5 A n n u a l R e p o r t


Life Plans Personal Loan

Mobile Banking App Auto Loan

The BetterBanking Experience (G4-PR8)

We value our customers feedback and design products

and services personalized for their unique banking needs.

Customer focus is at the heart of our commitment to

deliver our promise of BetterBanking.



GRI G4 Content IndexGRI CONTENT INDEX FOR ‘IN ACCORDANCE’ - CORE G4-32

General Standard Disclosure Page No.External

Assurance

G4-1 Statement from the senior most decision maker of the organization 6 No

G4-2 Description of key impacts, risks and opportunities 37 No

G4-3 Name of Organization 1 No

G4-4 Primary Brands, Products and / or services 1, 80 No

G4-5 Location of Organization’s Headquarter Back Cover No

G4-6 Number of countries of operation Only in the Philippines No

G4-7 Nature of ownership and legal form 50 No

G4-8 Markets Served (Geographic Breakdowns) 1 No

G4-9 Scale of Reporting Organization 48, 66 No

G4-10 Number of Employees by employment contract 66 No

G4-11 Percentage of Employees under collective bargaining 67 No

G4-12 Describe Organization’s Supply Chain Not significant No

G4-13 Report any significant changes in the reporting period There were no changes during the

reporting periodNo

G4-14 Report precautionary approach principle by organization None No

G4-15 Externally developed EES charter & Principles None No

G4-16 List of memberships in associations / industry associations 1 No

G4-17 List of entities included in Organization’s consolidated financial statement Same entities as this is combined Financial & Sustainability Report

No

G4-18 Explain process for defining report content & aspect boundaries 60 No

G4-19 List all identified material aspects in process of defining report content 62 No

G4-20 For each material aspect, report aspect boundary (within) 76 No

G4-21 For each material aspect, report aspect boundary (outside) 76 No

75 2 0 1 5 A n n u a l R e p o r t


Category AspectsRelevant section

Material concernsWithin

organizationOutside

organizationRelevance outside the

organization

Environment

Energy

Environment

Energy Conservation

√

WaterWater Conservation

GHG Emissions GHG Offset √

Solid Waste Waste management

√

Compliance to Environmental Standards

Meet regulatory Standards

√ √This applies to our borrowers to meet the environmental compliance.

Society Community Corporate Social Responsibility

Community Engagement Programs

√ √This applies to all our CSR programs and our partners.

Product Responsibility

Product & Service Labeling

Our Customers

Transparency of Products & Services

√

Customer PrivacyOur Customers

Client Information Security / Privacy

√

ComplianceRisk Management

Compliance with Regulatory Requirements

√

Labor Practices

Employment

Our People

Labor Practices & Employee Relations

√

Occupational Health & Safety

Safe Working Environment for Employees

√

Training & Education

Employee Development

√

Anti-Corruption Transparency in system

√

Economic

Risk & Opportunities

Enterprise Risk Management

Balancing Revenue with Cost & Risk

√

Pricing of Loans according to Risk

√

Economic Impacts Our Services Impact Investment √


(G4-20, G4-21)


General Standard Disclosure Page No. External Assurance

G4-22 Any statements from previous report has been restated & reason for restatement

The statements of income, statements of comprehensive income and statements of cash flows were restated to effect the reclassification of the operations of SLC as discontinued operations in the financial statements.

No

G4-23 Significant changes in Scope & Aspect boundaries from previous reporting period

None No

G4-24 List of all stakeholder groups engaged by organization 61 No

G4-25 Report basis for identification and selection of stakeholders 61 No

G4-26 Organization’s approach to stakeholder engagement 61 No

G4-27 Key topics & concerns raised through stakeholder engagement 61 No

G4-28 Reporting Period for information provided 60 No

G4-29 Date of most previous report 60 No

G4-30 Reporting Cycle 60 No

G4-31 Contact point for questions 92 No

G4-32 GRI Content Index Sheet 77 No

G4-33 Policy / practice of seeking External Assurance No Assurance was conducted for this report No

G4-34 Governance Structure of the Organization – committees 32 No

G4-35 Process for delegating authority for EES topics from highest governance body to Senior executives & employees

39 No

G4-36 Has organization appointed an executive level position with EES responsibility 37 No

G4-37 Report process for consultation between stakeholders and highest governance body

43 No

G4-38 Composition of highest governance body and its committee 32 No

G4-39 Report whether chair of highest governance body is also and executive officer

Chair of the Corporate Governance Committee is a Non-Executive Director.

No

G4-40 Nomination & selection process for highest governance body and its committees

32 No

G4-41 Process in place to avoid conflict of interest at workplace 43 No

G4-42 Role of highest governance body in developing and approving Values, mission, strategies, policies & goals

32 No

G4-43 Measures taken to enhance collective knowledge of governance body on EES topics

32 No

G4-44 Process for evaluation of highest governance body performance and actions taken in response to evaluation

33 No

G4-45 Role of highest governance body in identifying EES risks, impacts & opportunities

37 No

G4-46 Role of highest governance body in reviewing effectiveness of Risk Management process for EES

37 No

G4-47 Frequency of review of EES risks, impacts & opportunities 37 No

G4-48 Highest committee or position that formally reviews and approves SR The President formally approves the Annual Financial & Sustainability Report

No

G4-49 Process for communicating critical concerns 43 No

G4-50 Nature and quantity of critical concerns communicated No major concerns were raised No

G4-51 Remuneration policy of highest governance body 33 No

G4-52 Process for determining remuneration 33 No

G4-53 How stakeholder views & thoughts are accounted on remuneration Confidential No

G4-54 Ratio of total annual compensation of highest paid individual to median annual total compensation

Confidential No

G4-55 Ratio of percentage increase of annual total compensation for highest paid and median paid

Confidential No

G4-56 Organization’s values, principles, standards and norms 3 No

G4-57 Internal / external mechanism for seeking advice on ethical and lawful behavior related to integrity – such as helplines

92 No

G4-58 Internal / external mechanism for reporting concerns about unethical or unlawful behavior related to integrity – such as helplines

92 No

77 2 0 1 5 A n n u a l R e p o r t


Aspect Specific Disclosure Page No.

External Assurance

Economic

Material Aspect: Economic Impacts

G4-DMA 72 No

G4-EC1Direct Economic values generated & distributed, including revenues and other costs

47 No

G4-EC7 Impact of infrastructure investments & services 71 No

G4-EC8 Indirect Economic Impacts 71 No

Environment

Material Aspect: Energy

G4-DMA 63 No

G4-EN3 Energy Consumption Within the organization 64 No

G4-EN5 Energy Intensity 64 No

Material Aspect: Water

G4-DMA 64 No

G4-EN8 Total Water Withdrawal by Source 64 No

Material Aspect: Emissions

G4-DMA 65 No

G4-EN13 Habitats Protected or restored 65 No

Material Aspect: Waste

G4-DMA 64 No

G4-EN23Total Weight of waste by type and disposal method

64 No

Material Aspect: Compliance

G4-DMA We ensure to be compliant to all the regulatory bodies. No

G4-EN29Monetary value of significance fines due to non-compliance with environmental laws and regulations

No

Social

Material Aspect: Employment

G4-DMA 66 No

G4-LA1Total number & rate of employee turnover by age group, gender & region

No

G4-LA2Benefits provided to full time employees that are not provided to temporary or part time employees

68 No

G4-LA3Return to work and retention rates after parental leave by gender

All the employees returned to work after completion of their parental leave. No

G4-LA12Composition of governance bodies and employees according to gender, age group, minority group and other diversity indicators

28 No

G4-LA13Ratio of basic salary of men to women by employee category

The ratio of salary is based on performance and position and not on gender. No

Material Aspect: Occupational Health & Safety

G4-DMA 68 No

G4-LA 8Health & Safety topics covered in formal agreement with trade unions

68 No

Material Aspect: Training & Education

G4-DMA 68 No

G4-LA9Average hours of training per year per employee by employee category

68 No


Aspect Specific Disclosure Page No.

External Assurance

Social

Material Aspect: Human Rights

G4-DMA No

G4-HR3Total number of incidents of discrimination and actions taken

There were no such incidents. No

G4-HR4

Operations Identified in which Right to exercise freedom of association and collective bargaining may be at significant risk and actions taken to support these rights

Only employees with access to confidential information are not allowed to be a part of

collective bargaining.No

G4-HR5

Operations & suppliers identified as having significant risk for incidents of child labor and measure taken to abolish it

No

G4-HR6

Operations & suppliers identified as having significant risk for incidents of forced labor and measure taken to abolish it

No

G4-HR7

Percentage of security personnel trained in the organization’s policies or procedures concerning aspects of human rights that are relevant to operations

All our security personnel are outsourced and are regularly trained by agency on human rights topics.

No

Material Aspect: Community

G4-DMA 70 No

G4-SO1

Percentage of operations with implemented local community engagement, impact, assessments and developing programs

70 No

G4-SO2Operations with significant actual & negative impact on local community

70 No

Material Aspect: Anti Corruption

G4-DMA 41 No

G4-SO3Percentage & total number of operations analyzed for risk related to corruption and risk identified

41 No

G4-SO4Communication & training on anti-corruption policies & procedures

41 No

G4-SO5 Confirmed incidents of corruption & actions taken There were no such incidents No

Material Aspect: Compliance

G4-DMA 41 No

G4-SO8Monetary Value of significant fines for non-compliance with laws & regulations

None No

G4-PR4No. of Non-Compliance issues with voluntary codes governing product / service information

None No

G4-PR7Incidents of non-compliances to marketing laws & codes

None No

G4-PR9

Significant fines for non-compliance with laws & regulations concerning the use of products & services

None No

Material Aspect: Customer Management

G4-DMA 41 No

G4-PR3 Product & Service information labeling 13-16 No

G4-PR8Total number of complaints regarding breaches of customer privacy and losses of customer data

There were no such complaints. No

79 2 0 1 5 A n n u a l R e p o r t

PRODUCTS AND SERVICES (G4-4)

FOR CORPORATIONS AND BUSINESSES

Investment Banking and Capital Markets ServicesDebt Capital Markets (Registered Bonds, Corporate Notes, Private Placements)Equity Capital Markets (IPOs, Rights Offerings, Secondary Offerings, Follow-on Offerings, Preferred Share Issues)Financial AdvisoryMergers and AcquisitionsMoney Market: Commercial PapersProject FinanceSyndicated Loans

Credit FacilitiesBills PurchaseExport Packing CreditFloor Stock FinancingOmnibus LinePurchase of ReceivablesTerm LoansWorking Capital Financing

Structured Loan FacilitiesContract to Sell Financing FacilityDistributors FinancingGrower’s Poultry House Implements FinancingLoan Line with Third Party PDCs (PDC Discounting)Trade Payables Financing

GuaranteesCredit Line CertificationStandby Letters of Credit

Leasing ServicesChattel Mortgage (CHM) FacilitiesFinance LeaseOperating LeaseSale and Leaseback

Trade ServicesDocumentary CollectionLetters of CreditOpen Account ArrangementRemittance / TransfersTrust Receipts Financing

Cash Management ServicesCollection Management SolutionsDisbursement Management SolutionsLiquidity Management Solutions

Treasury ServicesDeposit Based ProductsFixed Income SecuritiesForeign ExchangeHedging Solutions

FOR INSTITUTIONAL AND INDIVIDUAL INVESTORS

Trust ServicesEscrowEstate PlanningFacility AgencyInvestment Management Account (IMA)Mortgage Trust Indenture / Collateral Trust IndentureRetirement FundUnit Investment Trust Fund (Peso and U.S. Dollar Denominated)

Stock Brokerage Services

FOR CONSUMERS

Consumer LoansAuto LoansHome LoansPersonal LoansSmall Business Loans

Credit CardsDiners ClubSecurity Bank MasterCard

Pre-paid and Debit Cards

Savings, Checking and Time Deposit Services

Electronic ChannelsAutomated Teller Machine (ATM)Security Bank Mobile App (iOS and Android)Security Bank Online (Retail Internet Banking)Security DigiBanker (Corporate Internet Banking)Security MobileBankerSecurity TeleBanker


BRANCH DIRECTORY

ACROPOLISE. Rodriguez Jr. Ave. (C-5), Libis Quezon CityTel. Nos. (02) 654-9525 (02) 477-4490 0998-9657334Fax No. (02) 654-9525

ADB AVENUEG/F, AIC Empire Tower, ADB Avenue corner Sapphire RoadOrtigas Center, Pasig CityTel. Nos. (02) 997-1801 0925-8997704Fax No. (02) 997-1966

ADRIATICO-P. FAURA1325 M. Adriatico St.Malate, ManilaTel. Nos. (02) 521-4395 (02) 526-0158 0925-525- 7693Fax No. (02) 526-0158

ALABANG235 Montillano St.Alabang, Muntinlupa CityTel. Nos. (02) 850-1282 (02) 842-2227 (02) 842-3922 0925-825-9820 Fax No. (02) 850-1282

ALABANG ACACIAG/F Kingston Tower, Acacia Ave. Madrigal Business Park, Alabang Muntinlupa CityTel. Nos. (02) 478-9806 (02) 807-0949 0922-872-2032Fax No. (02) 807-0358

ALABANG-INSULARG/F Tower II, Insular Life Corporate Center, Insular Life DriveFilinvest Corporate City, Alabang 1781, Muntinlupa CityTel. Nos. (02) 511-7411 (02) 403-0959 0932-868-2953Fax. No. (02) 403-0959

ALABANG-NORTHGATE*Indo-China DriveNorthgate Cyberzone FilinvestAlabang, MuntinlupaTel. Nos. (02) 802-0294 (02) 802-0096 0932-891-0458

ALICIANational Highway (Maharlika Highway), Poblacion, Alicia, IsabelaTel. Nos. (078) 662-8207 (078) 662-8206 0922-872-2056Fax No. (078) 662-8206

ALIMALL Level 2 Alimall, P. Tuazon St. Cubao, Quezon CityTel. Nos. (02) 437-2951 0925-525-7323Fax No. (02) 440-7904

ANGELESSBC Bldg., McArthur Highway Balibago, Angeles CityTel. Nos. (045) 322-7110 0922-872-2082Fax No. (045) 892-2419

ANGELES-STO. ROSARIO 292 Sto. Rosario St., Angeles CityTel. Nos. (045) 322-3054 (045) 322-3055 0925-525-8527Fax No. (045) 322-3054

ANNAPOLIS-GREENHILLSGreenhills Mansion 37 Annapolis St., San Juan CityMetro ManilaTel. Nos. (02) 721-1353 (02) 721-1463 0922-872-2045Fax No. (02) 721-1460

ANTIPOLOG/F CMDL Bldg., Circumferential Road, Brgy. San Roque, AntipoloTel. Nos. (02) 697-0705 (02) 697-0529 0925-825-9821Fax No. (02) 697-0705

ARNAIZ AVENUE920-922 Pasay Road, Makati CityTel. No. (02) 751-0844 (02) 751-0161 0925-745-9304Fax No. (02) 751-0161

ASEANA CITYAseana One Bldg., Bradco Ave. Aseana City, Parañaque CityTel. Nos. (02) 478-0760 0932-854-7307Fax No. (02) 478-0749

AYALA ALABANGEl Molito Bldg., Madrigal Business Park, Madrigal Ave., Ayala Alabang Muntinlupa CityTel. Nos. (02) 772-1701 (02) 772-1856 0922-872-2049Fax No. (02) 772-1705

AYALA - RUFINO6797 Ayala Ave., Makati CityTel No. (02) 464-3012 to 14 0925-825-9837 Fax No. (02) 808-7106

BACOLOD-LACSONG/F Insular Life Bldg., Lacson cor. Galo St., Bacolod CityTel. Nos. (034) 435-0856 0922-8722146Fax No. (034) 434-2225

BACOLOD-MANDALAGANG/F, O Residences, Lacson St. Mandalagan, Bacolod CityTel. Nos. (034) 707-2445 (034) 707-2448 0925-321-5283

BACOLOD-NORTH DRIVESBC Bldg., BS Aquino Drive cor. Hilado Extension, Bacolod CityTel. Nos. (034) 433-9065 0922-872-2145Fax No. (034) 435-0855

BAGUIOSBC Bldg., Abanao St. cor. Shagem St., Baguio CityTel. Nos. (074) 442-8053 0922-872-2084Fax No. (074) 442-2671

BALAGTASUnit 102 & 103 3A’s & E Bldg.I - Annex, Borol 1, Balagtas, BulacanTel. Nos. (044) 760-5404 to 05 0925-825-9823Fax No. (044) 760-5405

BALANGAGaleria Victoria, J. P. Rizal St. Poblacion, Balanga CityTel. Nos. (047) 237-0159 (047) 237-0081 0922-872-2281Fax No. (047) 237-0159

BALIWAG317 B.S. Aquino Ave.Baliwag, BulacanTel. Nos. (044) 766-3328 0922-872-2349Fax No. (044) 766-3297

BALUT#49 Honorio Lopez Blvd. cor. Rosario Nicasio St. Balut, Tondo, ManilaTel. Nos. (02) 516-5026 0922-872-2042Fax No. (02) 522-9242

BAMBANG1634 Bambang St. cor. Oroquieta St., Sta. Cruz, ManilaTel. Nos. (02) 734-1285 (02) 733-9714 0925-825-9824Fax No. (02) 734-1285

* Opened in 2016

81 2 0 1 5 A n n u a l R e p o r t

BRANCH DIRECTORY

BANAWE-KITANLADNos. 34-36 Banawe cor. Kitanlad Sts., Quezon CityTel. Nos. (02) 743-1755 (02) 711-1296 0922-872-2154Fax No. (02) 743-1752

BANAWE-MALAYAG/F GLC Bldg., Banawe Ave. cor. Malaya St., Quezon CityTel. Nos. (02) 711-0379 0932-891-0466Fax No. (02) 711-0394

BANAWE-QUEZON AVENUEG/F Kaminari Bldg., Banawe near cor. Quezon Ave., Quezon CityTel. Nos. (02) 354-9847 (02) 354-3101 0925-825-9825Fax No. (02) 354 9847

BANGKAL-MAKATIG/F Dasman Bldg., #1680 Evangelista cor. Del Pilar Sts. Bangkal, MakatiTel. Nos. (02) 888-8221 0932-851-8483Fax No. (02) 888-8232

BATANGASRizal Ave., Batangas CityTel. Nos. (043) 723-3143 0922-872-2108Fax No. (02) 520-6138

BATANGAS-PALLOCANM. Pastor Ave. cor. Callejon Viejo West Pallocan, Batangas CityTel. Nos. (043) 984-3020 0925-5257324Fax No. (043) 984-3019

BATINO-CALAMBAG/F CitiGold Bldg., Calamba PremierIndustrial Park Complex, Batino Calamba, LagunaTel. Nos. (049) 508-0567 0922-872-2245Fax No. (049) 508-0566

BEL-AIRNo. 40 Jupiter cor. Paseo de Roxas St., Bel-Air, Makati CityTel. Nos. (02) 896-3130 0922-872-2015Fax No. (02) 896-3313

BENAVIDEZ 1264-1266 Benavidez St.Sta. Cruz, ManilaTel. Nos. (02) 230-4864 (02) 495-1810 0925-525-7322Fax No. (02) 230-4864

BF PARAÑAQUEPresident’s Ave., BF Homes Parañaque CityTel. Nos. (02) 807-7910 0922-872-2155Fax No. (02) 807-1444

BICUTAN#39 Doña Soledad Ave. Better Living, Parañaque CityTel. Nos. (02) 822-1648 (02) 822-4938 0922-872-2176Fax No. (02) 822-4938

BIÑANNational Highway, Barrio San Vicente, Biñan, LagunaTel. Nos. (049) 511-6400 0922-8722107Fax No. (02) 520-8236

BINONDO#465-469 Ewan Bldg., Quintin Paredes St., Binondo, ManilaTel. Nos. (02) 244-5202 (02) 244-5201 0922-872-2051Fax No. (02) 243-1388

BLUMENTRITTChinese General Hospital Compound, Blumentritt cor. Aurora Blvd., Sta. Cruz, ManilaTel. Nos. (02) 741-5522 0922-872-2043Fax No. (02) 711-3365

BONI AVENUEG/F Bonifacio Residences612 Boni Ave. cor. Sikap St.Mandaluyong CityTel. Nos. (02) 532-4374 (02) 532-6604 0925-825-9826Fax No. (02) 532-6604

BUENDIA-DIANOmron Bldg., # 40 Buendia Ave. Brgy. San Isidro, Makati CityTel. Nos. (02) 553-8673 0932-891-0463Fax No. (02) 553-7391

BUTUANJ.C Aquino Ave., Butuan City Agusan del NorteTel. Nos. (085) 342-5048 (085) 815-5291 0932-845-3443Fax No. (085) 815-5292

CABANATUANDr. D Bldg., Del Pilar St. Cabanatuan City, Nueva EcijaTel. Nos. (044) 463-7636 0922-872-2086Fax No. (044) 463-3610

CABANATUAN-MAHARLIKAKilometer 112, Maharlika Highway Cabanatuan City, Nueva EcijaTel. Nos. (044) 940-2379 (044) 940-2735 0932-882-3685Fax No. (044) 940-2379

CAGAYAN DE ORO-OSMEÑASergio Osmeña St.Cagayan de Oro CityTel. Nos. (8822) 723411 (8822) 728774 0922-872-2152Fax No. (088) 853-3965

CAGAYAN DE ORO-VELEZVelez cor. Montalban St.Cagayan de Oro CityTel. Nos. (088) 856-6632 0922-872-2296Fax No. (088) 728334

CALAMBA-CROSSINGNational Highway, Calamba, LagunaTel. Nos. (049) 545-2196 (049) 545-1914 0922-872-2109Fax No. (02) 520-8818

CALAMBA-REALNational Highway, Brgy. Real,Calamba, LagunaTel. Nos. (049) 545-4406 (049) 545-4409 0925-825-9827Fax No. (049) 545-4406

CALAPANG/F H&M Center Bldg., J.P. Rizal St. Brgy. Camilmil, Calapan City Oriental MindoroTel. Nos. (043) 288-1713 0932-891-0460Fax No. (043) 441-0025

CAPITOL HILLSFairway Residences Condominium Capitol Hills Drive cor. Alpha Road Capitol Hills, Quezon CityTel. Nos. (02) 961-4068 0932-891-0459Fax No. (02) 961-4083

C. PALANCA-QUIAPO302-304 C. Palanca (Echague) cor. P. Gomez St., Quiapo, ManilaTel. Nos. (02) 353-9698 0922-8722014Fax No. (02) 353-6105

CAUAYANG/F, LCU Bldg., Maharlika Highway Cauayan City, IsabelaTel. Nos. (078) 652-3950 (078) 652-3949 0922-872-2267Fax No. (078) 652-3949

CATARMANG.H. Del Pilar cor. Marcos Sts. Catarman, Northern SamarTel. No. (055) 500-9390 0925-525-8532 Fax No. (055) 251-8841


CDO-GEORGETOWN CYBERMALLGeorgetown Cybermall, Rodolfo Pelaez Blvd., KauswaganCagayan de Oro CityTel. Nos. (088) 323-1654 (088) 323-1647 0925-825-9828Fax No. (088) 323-1647

CDO-LIMKETKAI1st level, East Concourse Annex Bldg., Limketkai MallCagayan de Oro CityTel. Nos. (088) 880-1258 (088) 880-1260 0925-525-7325Fax No. (088) 880-1625

CEBU-A.S. FORTUNA N.S. Building, AS Fortuna St. Banilad, Mandaue City, CebuTel Nos. (032) 344-6283 0922-872-2330Fax No. (032) 345-0028

CEBU-BUSINESS PARKMindanao Ave.Cebu Business Park, Cebu CityTel. Nos. (032) 238-0409 0922-8722136Fax No. (032) 238-0408

CEBU-JUAN LUNAPlaridel Street corner Osmeña Blvd. Cebu CityTel. Nos. (032) 254-4080 (032) 255-1448 0922-872-2137Fax No. (032) 253-0053

CEBU-OSMEÑA Osmeña Blvd., Cebu CityTel. Nos. (032) 416-8584 0932-868-2954Fax No. (032) 412-4873

CEBU-UPTOWN OSMEÑANo. 154 Osmeña Boulevard corner V. Urgello Street, Cebu CityTel No. (032) 414-1052 (032) 414-1050 0925-8028134Fax No. (032) 414-1050

CHINO ROCES AVENUE–DON BOSCO 2224 Chino Roces Ave. cor. Don Bosco St., Makati CityTel. Nos. (02) 621-6146 (02) 955-7435 0932-882-3681Fax No. (02) 621-6146

CLARK-ANGELESClark Center Two Bldg.Berthapil Compound III Clark Center, J. Abad Santos Ave. Clark Freeport Zone, Angeles CityTel. Nos. (045) 499-1247 0917-534-5830 0922-872-2238Fax No. (045) 499-1247

CLARK-MEDICAL CITY100 Gatwick GatewaySabah Al-Ahmad, Global Gateway Logistics City, Industrial Estate 5 Clark Freeport Zone, PampangaTel. Nos . (02) 499-5572 0925-610-01539Fax No. (045) 499-5570

COMMONWEALTHLot 10 Block 9 Commonwealth Ave., Quezon CityTel. Nos. (02) 932-9749 0922-872-2156Fax No. (02) 952-0295

CONCEPCION612 J.P. Rizal St., Concepcion 1 Marikina CityTel. Nos. (02) 941-3043 (02) 942-2818 (02) 941-4865 0925-825-9829Fax Nos. (02) 941-3043

CONGRESSIONALCongressional Ave. cor. EDSA, Quezon CityTel. Nos. (02) 927-6720 0922-872-2034Fax No. (02) 927-9219

CONGRESSIONAL TOWERCongressional Town Center No. 23 Congressional Ave. Brgy. Bahay Toro, Quezon CityTel. Nos. (02) 355-3709 (02) 332-9642 0932-891-0461Fax No. (02) 332-9642

CONNECTICUT-GREENHILLSNo. 47 Connecticut St. Northeast Greenhills, San Juan CityTel. Nos. (02) 570-2926 (02) 234-0856 0932-891-0456Fax No. (02) 570-2926

CUBAOUCKG Bldg., Araneta Center Cubao, Quezon CityTel. Nos. (02) 911-2879 0922-8722177Fax No. (02) 911-2877

DAGUPANMH Del Pilar, Dagupan CityTel. Nos. (075) 515-3444 (075) 522-0631 0922-872-2219Fax No. (075) 522-4783

DASMARIÑASGen. Emilio Aguinaldo Highway Dasmariñas, CaviteTel. Nos. (046) 416-1143 0922-872-2114Fax No. (02) 529-8157

DAVAO-BAJADAJP Laurel Avenue, Bajada, DavaoTel Nos. (082) 221-9359 (082) 224-0743 0925-525-8531Fax No. (082) 224-0743

DAVAO-LANANGJ.P. Laurel Highway, West Insular Village, Phase 3, LanangDavao CityTel. Nos. (082) 234-4350 (082) 234-2463 0932-8533816Fax No. (082) 234-4350

DAVAO-MAGSAYSAY#358 R. Magsaysay Ave.Davao CityTel. Nos. (082) 221-8413 (082) 221-6709 (082) 221-0164 0922-872-2138Fax No. (082) 221-3443

DAVAO-MONTEVERDEMonteverde cor. Bruno Gempesaw St., Davao CityTel. Nos. (082) 224-2966 0922-872-2139Fax No. (082) 222-2124

DAVAO-PANABOQuezon St., New Pandan Panabo City, Davao Del NorteTel. Nos. (084) 628-5377 (084) 822-2183 0922-872-2140Fax No. (084) 628-5377

DAVAO-RIZALAnda cor. Rizal Sts., Davao CityTel. Nos. (082) 221-0358 0922-872-2141Fax No. (082) 221-0357

DAVAO-TORIL Saavedra St., Toril, Davao CityTel. Nos. (082) 285-3724 0925-610-1545 0920-974-4380 0917-876-7814Fax No. (082) 285-2166

DEL MONTEG/F SBC Bldg., Lot 19-B Blk 344 Del Monte Ave., Quezon CityTel. Nos. (02) 415-1789 (02) 740-5985 0922-872-2179Fax No. (02) 740-6372

DELA COSTA-VALEROG/F Salcedo TowerNo. 169 H.V. Dela Costa St. Salcedo Village, Makati CityTel. Nos. (02) 551-0979 0932-863-9239Fax No. (02) 625-0605

83 2 0 1 5 A n n u a l R e p o r t

BRANCH DIRECTORY

DELA ROSAG/F King’s Court II Bldg. #2129 Pasong Tamo cor. Dela Rosa St., Makati CityTel. Nos. (02) 812-2620 (02) 811 -2913 0922-872-2017Fax No. (02) 893-2502

DIGOS Cor Vicente Sotto St., National Highway, Zone 1, Digos CityTel. Nos. (082) 237-0204 (082) 237-0517 0932-882-3678Fax No. (082) 237-0204

DILIMAN-MATALINO G/F, PM Apartments, No. 24 Matalino St., Brgy. CentralDiliman, Quezon CityTel. Nos. (02) 738-6632 0925-803-3970Fax No. (02) 738-6631

DIPOLOG 71 Quezon Ave., Dipolog CityTel. Nos. (065) 908-0993 0925-525-7326Fax No. (065) 908-0995

DIVISORIA IPasilio A Ledesma Bldg.#853 Tabora St., Binondo, ManilaTel. Nos. (02) 243-2440 (02) 243-3104 0922-872-2166Fax No. (02) 243-3105

DIVISORIA-STO. CRISTO#693 Sto Cristo St.Binondo, Manila Tel. Nos. (02) 244-4518 (02) 244-4517 (02) 244-4515 0922-872-2167Fax No. (02) 244-4517

DON ANTONIO HEIGHTSUnit 2, Lot 4 Block 6, Holy Spirit Drive, Brgy. Holy Spirit, Quezon CityTel. Nos. (02) 427-7413 (02) 428-1742 0925-610-1547Fax No. (02) 427-7413

DUMAGUETEPortal West Bldg., Silliman Ave. cor. Hibbard Ave., Dumaguete CityTel. Nos. (035) 422-0001 (035) 422-0002 0922-872-2372Fax No. (035) 422-0001

EASTWOODUnit LG 3-5 to LG 3-6Ground Floor, Le Grand 3E-Commerce Ave., Eastwood Quezon CityTel. Nos. (02) 584-3184 0922-872-2195Fax No. (02) 584-3183

E. RODRIGUEZ#970 E. Rodriguez Sr. Ave.Quezon CityTel. Nos. (02) 724-3927 (02) 724-3259 0922-872-2180Fax No. (02) 412-5030

E. RODRIGUEZ-NEW YORK AVE.1791 E. Rodriguez Sr. Ave.near corner New York St.Quezon CityTel. Nos. (02) 942-0783 (02) 942-0784 0925-825-9838Fax No. (02) 942-0783

E. RODRIGUEZ-SLMCUnits 104 to 107 Medical Arts Bldg. (MAB), St. Luke’s Medical CenterE. Rodriguez Sr. Ave., Quezon CityTel. Nos. (02) 723-0101 loc. 6104-6106 0932-891-0454Fax No. (02) 234-1055

EDSA CENTRALUnits 7 and 8 Level 1, Soho Central Shaw Blvd., Greenfield District Mandaluyong CityTel. Nos. (02) 661-5646 (02) 696-6864 0922-872-2044Fax No. (02) 661-5640

EDSA-KALOOKANNo. 512 EDSA near cor. Urbano Plata St., Kalookan CityTel. Nos. (02) 364-0049 0922-872-2254Fax No. (02) 363-5525

EDSA-MAGALLANESEDSA cor. Magallanes Ave.Brgy. Magallanes, Makati CityTel. Nos. (02) 853-0375 (02) 851-6452 (02) 853-7472 0925-825-831Fax No. (02) 853-0375

ELCANOElcano cor. San Nicolas St. Binondo, ManilaTel. Nos. (02) 708-5053 0922-872-2205Fax No. (02) 708-5046

EMERALDG/F The Taipan Place, Emerald Ave. Ortigas Center, Pasig CityTel. Nos. (02) 470-3104 0922-872-2208Fax No. (02) 470-2678

ERMITAUN Ave., cor. Bocobo and Churruca Sts., Ermita, ManilaTel. Nos. (02) 523-6567 (02) 523-6586 0922-872-2157Fax No. (02) 536-9060

EVANGELISTA-QUIAPO450 Evangelista cor. P. Paterno St. Quiapo, ManilaTel. Nos. (02) 353-2755 0922-872-2182Fax No. (02) 353-6416

FAIRVIEW-COMMONWEALTH Blk 2 Lot 21 Commonwealth Ave. Fairview, Quezon CityTel. Nos. (02) 428-6786 (02) 294-0417 0925-610-1544Fax No. (02) 294-0417

FORT BONIFACIO-INFINITYG/F The Infinity Tower, 26th St. Fort Bonifacio Global City, TaguigTel. Nos. (02) 553-0933 0922-884-3986Fax No. (02) 553-0936

FORT BONIFACIO-NET CUBEG/F Net Cube Bldg., 3rd Ave. cor. 30th St., E-Square Zone, Fort Bonifacio Global City, Taguig CityTel. Nos. (02) 659-5867 0922-872-2061Fax No. (02) 659-6908

FORT BONIFACIO-SLMCG/F Medical Arts Bldg. St. Luke’s Medical Center Fort Bonifacio Global City, TaguigTel. Nos. (02) 403-1668 0922-872-2252Fax No. (02) 403-3207

FORT-FAIRWAYS TOWERG/F Fairways Tower, Mc Kinley cor. 5th Avenue, Bonifacio Global City Taguig CityTel Nos. (02) 551-8996 (02) 551-9009 0925-802-8132 0917-8944407Fax No. (02) 551-9009


FORT-NAC TOWER Unit 02, G/F NAC Tower Bldg. 32nd St., Bonifacio Global City, TaguigTel. Nos. (02) 847-0490 0932-868-2956Fax No. (02) 847-0594

FORT-TRIANGLE DRIVEGround Floor, Philplans Corporate Center, 1012 Triangle DriveNorth Bonifacio, Bonifacio Global City, Taguig CityTel. Nos. (02) 832-1681 0925-802-9430Fax No. (02) 832-8849

G. ARANETANo. 128 G. Araneta Ave. Brgy. Doña Imelda, Quezon CityTel. Nos. (02) 713-0163 (02) 516-2500 0932-863-9237Fax No. (02) 516-2500

GENERAL SANTOSLot 1341 Ireneo Santiago Blvd. General Santos CityTel. Nos. (083) 301-8831 0922-872-2196Fax No. (083) 552-2504

GIL PUYATUnit 101 A, G/F, Oppen Building No. 349 Sen Gil J. Puyat Avenue Makati CityTel. Nos. (02) 621-6710 (02) 621-9169 0925-610-1540Fax No. (02) 621-9169

GRAMERCYG/F, Gramercy ResidencesKalayaan Avenue, Makati CityTel. Nos. (02) 403-7505 (02) 556-9324 0925-899-7703 0917-894-4831

GREENHILLS WESTG/F Henrys Bldg.No. 80 Ortigas Ave.Greenhills, San JuanTel. Nos. (02) 234-1076 0932-891-0465Fax No. (02) 451-2005

GUADALUPE#2185 Magsaysay Ave. Guadalupe, Makati CityTel. Nos. (02) 729-5784 882-1872 0922-872-2035Fax No. (02) 882-1868

GUADALUPE COMMERCIAL COMPLEXSpace MF 5A Main Floor Guadalupe Commercial ComplexEDSA Guadalupe, Makati CityTel. Nos. (02) 882-7162 (02) 882-7163 0925-825-9832Fax No. (02) 882-7163

HERRERAG/F Exchange Corner Building No. 107 V.A. Rufino cor. Bolanos & Esteban Sts., Legaspi VillageMakati CityTel. Nos. (02) 892-2190 (02) 892-3214 0922-872-2026Fax No. (02) 892-1636

HV DELA COSTAG/F Alpha Salcedo Bldg. HV Dela Costa St., Salcedo Village Brgy. Bel-Air, Makati CityTel. Nos. (02) 867-2156 0922-872-2027Fax No. (02) 867-3151

ILIGANQuezon Ave. cor. Obach St. Poblacion, Iligan CityTel. Nos. (063) 221-5227 0922-872-2150Fax No. (063) 221-3007

ILOILO-GENERAL LUNAG/F Insular Life Iloilo Bldg. Gen. Luna St., Brgy. San FelixIloilo CityTel. Nos. (033) 503-6686 (033) 503-6685 0922-872-2006

ILOILO-LEDESMACharly Resources Bldg. Ledesma cor. Quezon Sts., Iloilo CityTel. Nos. (033) 337-9653 0922-872-2143Fax No. (033) 337-7068

ILOILO-IZNARTJohn A. Tan Bldg., Iznart St.Iloilo CityTel. Nos. (033) 338-4951 0922-872-2142Fax No. (033) 338-4950

IMUSG/F 680 Home Appliances Bldg. Aguinaldo HighwayTanzang Luma, Imus, CaviteTel. Nos. (046) 471-5414 (046) 471-5568 0922-872-2115Fax No. (02) 529-8613

JUAN LUNA514 Juan Luna StreetBinondo, ManilaTel Nos. (02) 708-0372 (02) 708-2530 0925-301-7813Fax No. (02) 708-2530

KALENTONGG/F P & D Bldg.568 - 574 New Panaderos ExtensionMandaluyong CityTel. Nos. (02) 239-9727 (02) 625-7308 0925-825-9833Fax No. (02) 239-9727

KALIBONo. 263 Roxas AvenueKalibo, AklanTel. Nos. (036) 500-7662 (036) 500-7663 0925-321-5282

KALOOKAN#266 Rizal Ave. Extension Between 5th & 6th Ave. Grace Park, Kalookan CityTel. Nos. (02) 365-8703 (02) 365-8704 (02) 365-8705 (02) 294-7402 (02) 365-8706 0922-872-2047Fax No. (02) 362-3666

KAMIAS1418 Kamias Road cor. Anonas Extension, Brgy. Sikatuna Village Quezon CityTel. Nos. (02) 434-7716 (02) 433-3329 0925-825-9834Fax No. (02) 434-7716

KARUHATANG/F PRDC Bldg. 257 Mac Arthur Highway, KaruhatanValenzuela CityTel. Nos. (02) 239-2069 (02) 352-7869 0932-863-9243Fax No. (02) 352-7869

KATIPUNANG/F, Xanland Condominium Bldg. Katipunan Ave., Quezon CityTel. Nos. (02) 426-7036 (02) 426-7034 0922-872-2158Fax No. (02) 426-7036

85 2 0 1 5 A n n u a l R e p o r t

BRANCH DIRECTORY

KORONADALNo. 601 General Santos Drive Koronadal City, So. CotabatoTel. Nos. (083) 520-2115 0922-884-3972Fax No. (083) 228-7736

LAGROKm. 21 Quirino Highway Lagro, Quezon CityTel. Nos. (02) 376-3095 0932-853-3812Fax No. (02) 376-3115

LAPU LAPUM.L. Quezon National Highway cor. Patalinhug Ave., PajoBrgy. Sangi, Lapu-lapu City, CebuTel. Nos. (032) 260-2672 0932-863-9240Fax No. (032) 260-2671

LAOAGG/F LC Square, J.P. Rizal St.cor. Balintawak, Laoag CityTel. Nos. (077) 770-3311 (077) 770-3200 0922-872-2302Fax No. (077) 770-3200

LA TRINIDADBrgy. Pico, Km. 5 National Highway, La Trinidad, BenguetTel. Nos. (074) 422-1216 (074) 422-1586 0922-872-2089Fax No. (074) 422-1586

LA UNIONG/F Kenny Plaza, Quezon Ave. San Fernando City, La UnionTel. Nos. (072) 607-8802 0922-872-2090Fax No. (072) 700-5338

LAS PIÑAS277 Alabang-Zapote Road Pamplona Tres, Las Piñas CityTel. Nos. (02) 869-8478 (02) 869-8471 (02) 869-8424 0925-825-9835Fax No. (02) 869-8478

LEGAZPI Lot 34-36 Block 7, Landco Business Park, Bitano, Legazpi CityTel. Nos. (052) 480-3081 (052) 480-6014 0932-868-2955Fax No. (052) 480-6014

LIPACM Recto Ave., Lipa City, BatangasTel. Nos. (043) 756-2113 0922-872-2131Fax No. (02) 520-6234

LUCENADoña Christina Bldg. corner Tagarao & Merchan Sts. Lucena CityTel. Nos. (042) 373-1077 (02) 250-8266 0922-872-2132Fax No. (02) 250-8266

MAGDALENANos. 1025-1027 Masangkay near Soler St., Binondo, ManilaTel. Nos. (02) 243-4822 (02) 244-5743 0922-8722159Fax No. (02) 244-5744

MAIN OFFICE BRANCH (MOB)6776 Ayala Ave., Makati CityTel. Nos. (02) 888-7282 (02) 888-7283 (02) 888-7284 (02) 888-7285 (02) 891-1033 (02) 894-5301 0922-872-2067Fax No. (02) 891-1078

MAKATI AVENUE-CONSTELLATIONMakati Ave. Cor. Constellation St. Brgy. Bel-Air, Makati CityTel. Nos. (02) 942-8708 0932-891-0457Fax No. (02) 621-6758

MALABON#2 Manapat St. cor. Rizal Ave. Extension, Malabon CityTel. Nos. (02) 281-2880 0922-872-2185Fax No. (02) 281-5903

MALABON-POTREROUnits 8 & 9 Mary Grace Bldg.142 McArthur Highway, Potrero Malabon CityTel. Nos. (02) 442-3757 (02) 442-3657 0925-825-9836Fax No. (02) 442-3657

MALABON-TUGATOG137 M.H Del Pilar St. Brgy. Tugatog, Malabon CityTel. Nos. (02) 990-9653 0932-848-0042Fax No. (02) 990-3225

MALATEM. Adriatico cor. San Andres St. Malate, ManilaTel. Nos. (02) 524-8112 (02) 567-6258 0922-872-2186Fax No. (02) 521-0745

MALINTA-PASO DE BLAS#271 Paso de Blas, Valenzuela CityTel. Nos. (02) 292-5804 0922-872-2187Fax No. (02) 292-6133

MALOLOSFeliza Jazz Bldg., Mac Arthur Highway, Sumapang Matanda Malolos City, BulacanTel. Nos. (044) 796-1982 0922-872-2095Fax No. (044) 796-1983

MANDALUYONGG/F Shaw Center MallNo. 360 Shaw Blvd., Brgy. Addition Hills, Mandaluyong City Tel. Nos. (02) 534-3232 (02) 531-7381 0922-872-2188Fax No. (02) 531-7381

MANDALUYONG-EDSA167 Epifanio Delos Santos Ave. Mandaluyong CityTel. Nos. (02) 625-6825 (02) 625-6829 0932-868-2958 0917-801-4305Fax No. (02) 625-6825

MANDALUYONG-LIBERTAD D.M. Guevarra St. cor. Calbayog St. Mandaluyong CityTe. Nos. (02) 650-1576 0925-525-7321Fax No. (02) 949-5720

MANDALUYONG-PIONEERG/F Madison Square Plaza Pioneer cor. Sheridan Sts. Mandaluyong CityTel. Nos. (02) 234-0960 0932-863-9241Fax No. (02) 234-1114

MANDAUETipolo Square, Mandaue Highway Tipolo Mandaue City, CebuTel. Nos. (032) 345-0564 0922-872-2197Fax No. (032) 345-2582

MANDAUE-NORTH ROAD31 J.P Rizal St., Insular Square Brgy. Tabok, Mandaue CityTel. Nos. (032) 520-9065 (032) 520-9066 0922-872-2329Fax No. (032) 520-9065


MARIKINABayan-Bayanan Ave. Concepcion, MarikinaTel. Nos. (02) 942-2565 (02) 943-0423 0922-872-2189Fax No. (02) 941-0689

MARIKINA-GIL FERNANDO AVENUEBlock 6 Lot 10 Almond St. cor. Gil Fernando Ave.Brgy. San Roque, Marikina CityTel. Nos. (02) 703-3152 (02) 625-1807 0932-868-2957Fax No. (02) 625-7889

MARKET! MARKET!157-A G/F Market! Market! Mall Bonifacio Global City, TaguigTel. Nos. (02) 886-6685 (02) 846-6413 (02) 856-1545 0922-872-2190Fax No. (02) 887-1730

MAYPAJOAPN Bldg., #172 A. Mabini St. Maypajo, Caloocan CityTel. Nos. (02) 285-6249 0922-872-2191Fax No. (02) 285-9065

MCKINLEY HILLG/F, Commerce and Industry Plaza Mc Kinley HillTel. Nos. (02) 795-7451 (02) 795-7450 0925-899-7700Fax No. (02) 795-7450

MEDICAL CITYG/F Medical Arts Tower Inc. The New Medical City Hospital along Ortigas Ave., Meralco Compound, Ortigas Ave., Pasig CityTel. Nos. (02) 706-0445 0922-872-2165Fax No. (02) 706-0276

MEDICAL PLAZAG-103 Medical Plaza Bldg. Dela Rosa cor. Amorsolo St. Makati CityTel. Nos. (02) 813-6536 (02) 813-6549 0922-872-2028Fax No. (02) 813-6544

MENDIOLALa Consolacion College ManilaNo. 8 Mendiola St., San Miguel ManilaTel. Nos. (02) 734-7507 0922-872-2160Fax No. (02) 735-2746

MERALCO AVENUEG/F Suntree TowerNo. 13 Meralco Ave. Ortigas Center, Pasig CityTel. Nos. (02) 570-6101 0932-863-9235Fax No. (02) 570-3836

MEYCAUAYANMeycauayan College Bldg. Calvario, Meycauayan, BulacanTel. Nos. (044) 288-2455 0922-872-2098Fax No. (044) 228-3516

MINDANAO AVENUE G/F, Metro North Medical Center and Hospital, Mindanao Ave. near cor. Congressional Ave.Quezon CityTel. Nos. (02) 351-4262 0925-803-3972Fax No. (02) 351-4262

MOLINOG/F E.V.Y Bldg., Molino Blvd. Molino, Bacoor, CaviteTel. Nos. (046) 477-2449 0922-884-3957Fax No. (046) 477-2166

MONTALBANJ.P. Rizal St., Manggahan Montalban, RizalTel. Nos. (02) 997-165 (02) 941-4864 0925-825-9838Fax No. (02) 941-4864

NAGALAM Bldg., Peñafrancia Ave. Zone 4, San Francisco, Naga CityTel. Nos. (054) 472-4210 (054) 811-1873 0922-872-2099Fax No. (02) 250-8008

NAGA DIVERSION ROAD M. Roxas Ave. (Diversion Road) Naga City, Camarines SurTel. Nos. (054) 472-1022 (054) 881-1071 0932-882-3677Fax No. (054) 472-1022

NAIA2/F Arrival Lobby, NAIA Complex Pasay CityTel. Nos. (02) 833-1190 0922-872-2036Fax No. (02) 833-1191

NAIA-TERMINAL 3Stall No. 15, Arrival Lobby of Terminal 3, Ninoy Aquino International Airport, Pasay CityTel. Nos. (02) 834-9835 (02)834-9836 0922-872-2268

NAVOTAS318 North Bay Blvd. South, Navotas CityTel. Nos. (02) 373-2749 0925-3017812Fax No. (02) 373-2751

NIEVAG1 & G2 Asian Mansion 2 Dela Rosa cor. Nieva St. Legaspi Village, Makati CityTel. Nos. (02) 843-6537 0922-872-2029Fax No. (02) 843-6322

NINOY AQUINO AVENUEG/F PAIR-PAGS Centre NAIA Complex, Ninoy Aquino Ave. Parañaque CityTel. Nos. (02) 832-1286 (02) 832-9463 0922-872-2037Fax No. (02) 836-7370

NOVALICHESKrystle Bldg., 858 Quirino Highway Novaliches, Quezon CityTel. Nos. (02) 936-3506 0922-872-2192Fax No. (02) 936-6374

NOVALICHES-BAYAN897 Quirino Hi-way, Brgy. Gulod Novaliches, Quezon CityTel. Nos. (02) 936-4491 (02) 939-7298 0925-825-9839Fax No. (02) 936-4491

NUVO CITY ASPIREGF, Aspire Tower at Nuvo City150 E. Rodriguez Jr. Ave.corner Calle Industria, Bagumbayan Quezon CityTel Nos. (02) 294-9881 0925-899-7701Fax. No. (02) 292-3432

OLONGAPOUnit No. 2, G/F RM Centrepoint Bldg., Rizal Ave. cor. Magsaysay Drive, East Tapinac, Olongapo CityTel. Nos. (047) 222-2275 0932-891-0462Fax No. (047) 222-0608

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BRANCH DIRECTORY

ONGPIN G/F Strata Gold, 738 Ongpin St. Binondo, ManilaTel. Nos. (02) 450-4109 (02) 256-6105 0925-803-3976Fax No. (02) 256-6105

ORMOCG/F Niko’s Ark Bldg., Real St. Poblacion, Ormoc City, LeyteTel. Nos. (053) 255-4118 (053) 561-0369 0922-886-6759Fax No. (053) 561-0369

ORTIGAS-GREENHILLSSBC Bldg., #228 Ortigas Ave. Greenhills, San JuanTel. Nos. (02) 721-4148 (02) 721-1967 (02) 631-9542 0922-872-2038Fax No. (02) 721-1967

ORTIGAS-PEARL DRIVEUnit 103 G/F, Pearl Plaza Condominium, Lourdes St. cor. Pearl Drive, Ortigas Center Pasig CityTel. Nos. (02) 584-7584 (02) 584-7585 0925-825-9840Fax No. (02) 584-7584

P. GUEVARRA-WILSON#5 P. Guevarra St. Corner Averilla St., San JuanTel. Nos. (02) 570-3766 570-3774 0932-882-3686Fax No. (02) 570-3766

PAGADIANRizal Avenue corner Benigno Aquino Street, Pagadian CityTel. Nos. (062) 925-0563 (062) 215-4709 0925-802-9422Fax No. (062) 925-0563

PANDACAN#2339 Palumpong St. Pandacan, ManilaTel. Nos. (02) 564-4891 0922-872-2193Fax No. (02) 563-3391

PASAY CITY MALLG/F-07, Ground Floor, Victory Pasay Mall, Taft Ave. corner Libertad St. Pasay CityTel. Nos. (02) 403-7376 (02) 403-7378 0925-825-9841Fax Nos. (02) 403-7376

PASAY LIBERTADLibertad cor. Colayco St., Pasay CityTel. Nos. (02) 831-0471 0922-872-2194Fax No. (02) 831-8163

PASAY MACAPAGAL AVENUEM1-A, 8 Macapagal PlaceHobbies of Asia, No. 8 Pres. D. Macapagal Ave., Pasay CityTel. Nos. (02) 556-4291 0922-872-2198Fax No. (02) 556-4304

PASAY-TAFTNo. 1924 Taft Ave. cor. Bernabe St. Pasay CityTel. Nos. (02) 516-4067 (02) 516-4587 0932-863-9238Fax No. (02) 516-4067

PASEO DE ROXASCorporate Business Center #151 Paseo de Roxas cor. Arnaiz Ave., Makati CityTel. Nos. (02) 840-1970 (02) 815-1002 (02) 815-1003 0922-872-2030Fax No. (02) 840-1969

PASIG BOULEVARDLot #21 Pasig Blvd. cor. Rosemarie Lane, Kapitolyo Pasig CityTel. Nos. (02) 234-0155 0922-872-2055Fax No. (02) 234-0159

PASIG C. RAYMUNDOThe Quorum CenterC. Raymundo Ave. Caniogan, Pasig CityTel. Nos. (02) 654-1273 0932-851-8479Fax No. (02) 654-2611

PASIG MABINIMabini cor. Dr. Pilapil St. Kapasigan, Pasig CityTel. Nos. (02) 451-0465 0932-853-3811Fax No. (02) 451-0413

PASIG-MERCEDES AVENUEMercedes Avenue corner M. Suarez Avenue (Market Avenue) Brgy. San Miguel, Pasig CityTel. Nos. (02) 628-3437 (02) 628-1496 0925-825-9842Fax No. (02) 628-2952

PASIG SANTOLANG/F Unit 101-A AD Center Square Amang Rodriguez cor. Evangelista St., Santolan, Pasig CityTel. Nos. (02) 681-4618 0922-872-2175Fax No. (02) 646-4113

PASIG-SHAW BOULEVARD Freemont Arcade, No. 11 Shaw Boulevard, Brgy. San AntonioPasig CityTel. Nos. (02) 955-6590 (02) 955-5690 0932-882-3674Fax No. (02) 955-5708

PASONG TAMOG/F Narra Bldg., Pasong Tamo Extension, Makati CityTel. Nos. (02) 892-8535 (02) 814-0267 0922-872-2040Fax No. (02) 892-8536

PASONG TAMO-LA PAZG/F, Jade Residences II, 1120 Don Chino Roces Ave., Makati CityTel. Nos. (02) 555-1069 (02) 555-1137 0925-8259843Fax No. (02) 555-1137

PLARIDELG/F Plaza Plaridel Bldg., No. 263Padilla Road, Banga 1st Plaridel, BulacanTel. Nos. (044) 795-0458 (044) 795-0468 0925-825-9844Fax No. (044) 795-0458

PUERTO PRINCESARizal Ave., Puerto Princesa City PalawanTel. Nos. (048) 433-0052 0932-854-7301Fax No. (048) 433-0053

QUEZON AVENUE-CAPITOL MEDICALG/F Capitol Medical Center Quezon Ave. Cor. Scout Magbanua Quezon CityTel. Nos. (02) 441-4729 0922-872-2206Fax No. (02) 441-4728

QUEZON AVENUE-SOUTH TRIANGLE Unit B and C, JR Bldg.1520 Quezon Ave., South Triangle Quezon CityTel. Nos. (02) 410-8891 (02) 410-9687 0925-525-8529Fax No. (02) 410-8891


QUIRINO HIGHWAY#360 Quirino Highway Sangandaan, Novaliches Quezon CityTel. Nos. (02) 454-0981 0922-872-2041Fax No. (02) 939-1262

REGALADO FAIRVIEWAngelus Bldg., 22 Regalado Ave. West Fairview, Quezon CityTel. Nos. (02) 373-4439 (02) 373-4347 0925-825-9845Fax No. (02) 373-4439

REINA REGENTE#1040 Reina Regente Binondo, ManilaTel. Nos. (02) 244-8827 (02) 244-8850 0922-872-2207Fax No. (02) 244-8825

REPOSO–J.P. RIZAL G/F, Kalimera Bldg., Nicanor Garcia St. near cor. J.P. Rizal Ave.Makati CityTel. Nos. (02) 942-8907 0932-863-9242Fax No. (02) 942-8914

RETIRON.S. Amoranto, Sr. Ave. cor. Mayon Ave., La LomaQuezon CityTel. Nos. (02) 412-4206 (02) 501-2790 0925-825-9846Fax No. (02) 412-4206

ROMAN SQUARERoman Square Bldg. #979-981 Soler corner Roman St. Binondo, ManilaTel. Nos. (02) 244-1395 (02) 244-1396 0922-872-2048Fax No. (02) 244-3734

ROOSEVELT182-A Roosevelt Ave. San Francisco Del Monte Quezon CityTel. Nos. (02) 921-2741 (02) 921-2750 0932-851-8481Fax No. (02) 921-2750

ROSARIOG/F SBC Bldg., Gen. Trias Ave. Tejero, Rosario, CaviteTel. Nos. (046) 438-5434 0922-872-2085Fax No. (02) 529-8854

ROXAS BOULEVARDUnit 103 VIP Bldg. Roxas Blvd. cor. Nuestra Señora de Guia St., Ermita, ManilaTel. Nos. (02) 405-0262 0932-891-0455Fax No. (02) 405-0150

ROXAS CITYLawaan Highway cor. Sacred Heart of Jesus St., Pueblo de Panay Lawaan, Roxas CityTel. Nos. (036) 520-3001 (036) 520-3002 0932-854-7299Fax No. (036) 520-3001

SALCEDOLPL Plaza Building #124 L.P. Leviste St. Salcedo Village, MakatiTel. Nos. (02) 840-3242 (02) 840-3720 0922-872-2031Fax No. (02) 812-4045

SAMPALOC1700 G. Tuazon St.M. Dela Fuente St.Sampaloc, ManilaTel. Nos. (02) 781-3112 (02) 781-3116 0925-825-9847Fax No. (02) 781-3113

SANGANDAAN32 A. Mabini St., SangandaanCaloocan CityTel. Nos. (02) 285-0344 (02) 287-3646 0925-825-9850Fax No. (02) 285-0345

SANTIAGOG/F Flora Sy Bldg. Maharlika Highway, Victory Norte Santiago City, IsabelaTel. Nos. (078) 305-0383 0922-872-2093Fax Nos. (078) 305-2908 (02) 246-2001

SAN FERNANDOG/F Doña Sevilla Bldg. McArthur Highway, Brgy. Dolores San Fernando City, PampangaTel. Nos. (045) 961-8692 0922-872-2087Fax No. (045) 961-8693

SAN FERNANDO-DOLORESAMHSCO Bldg., Mac Arthur Highway, Dolores, San Fernando City, PampangaTel. Nos. (045) 435-2206 (045) 435-2242 0925-825-9848Fax. No. (045) 435-2242

SAN JUAN–PINAGLABANANUnit C & D No. 18 Pinaglabanan Square, Pinaglabanan St.San Juan CityTel. Nos. (02) 650-2162 (02) 650-2163 0925-803-3974Fax No. (02) 650-2162

SAN MIGUEL AVENUE#101 Medico Bldg. San Miguel cor. Lourdes St. Pasig CityTel. Nos. (02) 633-3876 (02) 633-6822 0922-872-2209Fax No. (02) 631-3876

SAN PABLORizal Ave. cor. P. Zamora St. San Pablo, LagunaTel. Nos. (049) 562-5327 0922-872-2091Fax No. (02) 520-6052

SAN PEDROMabini St., Poblacion San Pedro, LagunaTel. Nos. (02) 808-4811 0922-872-2092Fax No. (02) 520-1296

SAN PEDRO-PACITA COMPLEXG/F Allen Bldg., KM 31 National Highway Brgy. NuevaSan Pedro, LagunaTel. Nos. (02) 847-6832 to 33 (02) 808-3274 0925-825-9849Fax No. (02) 808-3274

SOLERLe Mar Ben II Bldg. along San Bernardo St. Sta. Cruz, ManilaTel. Nos. (02) 733-2704 (02) 733-2718 0922-872-2161Fax No. (02) 733-2694

STA. ELENA168 Shopping Mall, Sta. Elena St. Binondo, ManilaTel. Nos. (02) 245-5506 (02) 245-5509 0922-872-2212Fax No. (02) 243-5678

STA. MARIA-BULACANF. Halili Ave., Brgy. Bagbaguin Sta. Maria, BulacanTel. Nos. (044) 641-1718 0922-872-2368Fax No. (044) 641-4279

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BRANCH DIRECTORY

STA. ROSABo. Pulong, Sta. Cruz Sta. Rosa, LagunaTel. Nos. (049) 539-1562 0922-872-2096Fax No. (02) 520-8164

STA. ROSA-BALIBAGONational Highway, BalibagoSta. Rosa, LagunaTel. Nos. (049) 534-2933 to 34 0925-825-9851Fax No. (049) 534-2933

STA. ROSA-GREENFIELD G/F, Unit 33 and 34, Laguna Central Mall, Greenfield City, Don JoseSta. Rosa City, LagunaTel. Nos. (049) 530-9536 0925-525-7697Fax No. (049) 530-9537

ST. IGNATIUS-KATIPUNANNo. 119 Katipunan Ave. Quezon CityTel. Nos. (02) 709-7884 (02) 709-3610 (02) 294-7511 0932-854-7302Fax No. (02) 709-3610

STARMALL LAS PIÑASG/F Starmall Complex C.V Starr Ave. Philamlife Village Pamplona II, Las Piñas CityTel. Nos. (02) 846-5351 0922-872-2184Fax No. (02) 846-5344

SUBIC G/F, Formosa Tower, Subic Commercial & Light Industrial ParkManila Ave., Subic Bay Freeport Zone, ZambalesTel. Nos. (047) 252-3431 0922-872-2097Fax No. (047) 252-6086

SUCATSBC Bldg., Dr. A. Santos Ave. cor. St. Peter St., SucatParañaque CityTel. Nos. (02) 820-6269 (02) 826-2130 0922-8722213Fax No. (02) 825-3163

SUCAT-SAN ISIDROB. Dela Cruz Compound7448 Dr. A. Santos AveSucat, ParañaqueTel. Nos. (02) 825-6067 (02) 826-6667 (02) 826-6584 0925-825-9852Fax No. (02) 826-6584

SUMULONGG/F Silicon Bldg., #167 Sumulong Highway, Mayamot, Antipolo, RizalTel. Nos. (02) 682-3011 0922-872-2214Fax No. (02) 682-3017

SURIGAOSan Nicolas cor., Diez Streets Surigao CityTel Nos. (086) 826-1020 0925-301-7815Fax No. (086) 310-0164

TACLOBANG/F Roqson Bldg., cor. P. Burgos St. and Rizal Ave., Tacloban CityTel. Nos. (053) 321-4527 0917-830-2923

TAFT-NAKPILSM Lazo Clinics, Taft Ave. cor. Nakpil St., Malate, ManilaTel. Nos. (02) 405-0134 0932-891-0453Fax No. (02) 522-2322

TAFT-VITO CRUZUnit 3, G/F, 2 Torre Lorenzo Condominium Bldg. 2444 Taft Ave., Malate, ManilaTel. Nos. (02) 521-0926 (02) 241-0791 0925-878-9121Fax No. (02) 521-0926

TAGAYTAYSBC Bldg., Aguinaldo Highway Mendez Crossing, Tagaytay CityTel. Nos. (046) 413-1859 0922-872-2144Fax No. (02) 529-8170

TAGBILARANBMN Bldg., Carlos P. Garcia Ave.Tagbilaran City, BoholTel. Nos. (038) 501-0174 (038) 411-2930 0922-872-2148Fax No. (038) 501-0174

TAGUMG/F Uy Ching Siong Commercial Bldg., Pioneer Ave. cor. Quezon St. Tagum CityTel. Nos. (084) 655-6562 0922-872-2016Fax No. (084) 655-6562

TANAUANG/F Unit No. 119-A & B, Tanauan Commercial Center Brgy. Poblacion VII, Tanauan City BatangasTel. Nos. (043) 778-7134 0925-825-9853Fax No. (043) 778-7129

TANDANG SORANo. 400 Tandang Sora Ave.Brgy. Culiat, Quezon CityTel. Nos. (02) 455-2769 (02) 456-1350 0922-825-9822Fax No. (02) 455-2769

TARLACG/F, Intellect Bldg., along MacArthur Hi-way, Brgy. San SebastianTarlac CityTel. Nos. (045) 628-0147 0922-872-2094Fax No. (045) 628-0396

TAYTAY137 Rizal Ave., Brgy. Dolores Taytay, RizalTel. Nos. (02) 658-7225 (02) 660-2878 0925-825-9855Fax No. (02) 660-8425

TAYTAY-ORTIGAS EXT.Km. 23 Ortigas Ave. Extension Taytay, RizalTel. Nos. (02) 658-0031 (02) 658-0032 0922-872-2215Fax No. (02) 660-2287

TAYUMAN1180 Tayuman St., Tondo, ManilaTel. Nos. (02) 708-7864 (02) 230-2624 0925-825-9854Fax No. (02) 708-7864

TEKTITE TOWERSG/F East Tektite Towers, Exchange Road, Ortigas Center, Pasig CityTel. Nos. (02) 636-1653 (02) 631-5854 0922-872-2050Fax No. (02) 636-1655

TIMOG AVENUEToyama Group Center22 Timog Ave., Brgy. Laging HandaQuezon CityTel. Nos. (02) 376-7186 (02) 376-4398 0925-802-9428Fax No. (02) 376-7186


* Opened in 2016

TOMAS MORATOG/F Maine Bldg.Tomas Morato Ave., Quezon CityTel. Nos. (02) 426-2866 0922-872-2162Fax No. (02) 415-2556

TUGUEGARAOA. Bonifacio cor. Washington St. Centro, Tuguegarao, CagayanTel. Nos. (078) 844-2320 (078) 844-1016 0922-872-2149 0918-906-8390Fax No. (078) 844-8753

UN AVENUEUnits 1110 & 1112 Dolmar Bldg. UN Avenue, Paco, Manila Tel. Nos. (02) 525-9208 (02) 522-4013 (02) 527-2075 0925-802-9429Fax No. (02) 525-9208

URDANETAG/F S & P North BuildingNational HighwayBrgy. Nancayasan, Urdaneta City PangasinanTel. Nos. (075) 656-8001 (075) 656-8002 (075) 568-2284 0922-872-22328Fax No. (075) 568-2284

UST G/F Quadricentennial PavillionUST Compound, España, ManilaTel. Nos. (02) 749-9739 (02) 731-3118 0922-872-2163Fax No. (02) 749-9703

VALENZUELAKm. 14 McArthur Highway Malinta, Valenzuela CityTel. Nos. (02) 292-1911 0922-872-2151Fax No. (02) 292-7311

VALLE VERDEE. Rodriguez Jr. Ave. cor. Borres St. Brgy. Bagong Ilog, Pasig CityTel. Nos. (02) 671-7135 0922-872-2216Fax No. (02) 671-7134

VIGANG/F Luisa Building, Quezon Avenue corner Salcedo Street, Vigan City Ilocos SurTel Nos. (077) 674-0103 (077) 674-0249 0925-301-7816Fax No. (077) 674-0249

VISAYAS AVENUE-PROJECT 6 No. 53 Visayas Ave., Brgy. Vasra Project 6, Quezon CityTel. Nos. (02) 921-6664 (02) 921-6702 0925-525-8528Fax No. (02) 921-6664

WACK WACKG/F Lee Gardens Condominiumcor. Shaw Blvd. & Lee St. Wack Wack, Mandaluyong CityTel. Nos. (02) 584-2153 0922-872-2181Fax No. (02) 584-2109

WEST AVENUE 4 Bulletin St. cor. West Ave. Quezon CityTel. Nos. (02) 412-4027 (02) 949-2570 0925-525-7694Fax No. (02) 949-2570

YLAYA TONDO*No. 938, Ylaya St., Tondo, ManilaTel. Nos. (02) 521-6679 (02) 521-6690

ZAMBOANGAVeterans Ave., Zamboanga CityTel. Nos. (062) 991-0056 (062) 991-0183 0922-8722147Fax No. (062) 993-2970

ZAMBOANGA-CANELARMayor Jaldon St., Barangay Canelar Zamboanga CityTel. Nos. (062) 991-4914 (062) 992-1217 0932-851-8478Fax No. (062) 991-4914

91 2 0 1 5 A n n u a l R e p o r t

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Security Bank CorporationOffice of the Corporate Secretary8th Floor, Security Bank CentreAyala Avenue, Makati CityTel. Nos. (632) 888-7335 or (632) 888-7215

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For Investor RelationsPlease call (632) 888-7221 or [email protected]

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S e c u r i t y B a n k C o r p o r a t i o n92 S e c u r i t y B a n k C o r p o r a t i o n

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