Grupo Security Profit Up 12.2% in 2012
For the year ended December 31, 2012, Grupo Security posted profit of
Ch$46,561 million, driven mainly by strong performances from Vida Security,
Factoring Security and Travel Security.
Profit for the fourth quarter of 2012 reflected an increase of 51.8% with respect to the same period in 2011.
Grupo Security reported profit of Ch$46,561 million for the year 2012, which represents an increase of 12.2% over 2011. With this, return on average equity was 12%. Grupo Security reported consolidated EBITDA for the year ended December 31, 2012, of Ch$71,111 million, up 18.8% from the prior year.
With these results, earnings per share as of December 2012 totaled Ch$16.15. During the year shareholders were paid total dividends of Ch$10 per share, equivalent to 61.9% of profit for the period.
Grupo Security reported an increase of 33.8% in revenue with respect to the prior year. Group administrative expenses grew 35% as a result of the growth plan introduced to the market during the 2011 capital increase. This plan, which involves the banking, insurance, factoring, travel and real estate subsidiaries, has enabled them to strengthen their positions in their respective segments and expand their product offerings.
Loans at Banco Security—Grupo Security's main asset—totaled Ch$3,021 billion, up 15.6% YoY as of December 2012, an improvement over the banking system's 12.2%, excluding investments in Colombia. The retail segment deserves special mention with loan growth of 23.5% over December 2011. Commercial loans continued to grow, expanding 14.4% in 2012, as compared to 13.2% for the banking system. These figures exceed the targets set as part of the bank's expansion project.
In the insurance area, Vida Security increased its direct premiums by 63.1%, totaling Ch$156,462 million thanks to sales of annuities—which began in July 2011—and to new installments of Disability and Survival Insurance (SIS) awarded to Vida Security in April that took effect in July 2012. Excluding retirement insurance, the subsidiary's direct premiums increased 16.6% YoY, totaling Ch$74,795 million. Investment income at Vida Security increased 86% to Ch$52,413 million, mainly due to improved performances by variable income instruments.
The performance of Factoring Security also deserves mention, posting profit of Ch$4,838 million in 2012, up 57.6% from the prior year. This is attributable to growth of 17% in factored receivables, which totaled Ch$196,390 million. These figures compare favorably with the industry's variation of 8.8%.
Travel Security recorded total sales of US$285 million and profit of Ch$2,411 million, which are 17.8% and 35.5% higher, respectively, than the prior year. In mid-July 2012, Travel Security acquired a 75% interest in Travex, Peru’s third largest travel agency. With this acquisition, Travel Security will continue its business development and regional expansion plans. Travex had total sales of US$59 million in 2012, up 16.4% from the prior year.
Yesterday, March 14, 2013, Grupo Security announced that it had signed an agreement to acquire the Cruz del Sur companies from the Angelini group for UF 6.2 million. The deal will add one of the leading, most well-recognized companies in the Chilean financial market to Grupo Security.
The transaction—Grupo Security's fourth acquisition in the past six years—will strengthen its leadership in the financial sector, enhance its product and service offering, expand its customer base, improve its efficiency ratios by increasing the scale of its operations and ultimately increase future profits. The transaction demonstrates the commitment to growth that Grupo Security has made to its shareholders.
In the context of this deal, Grupo Security reported a material event to the Securities and Insurance Supervisor and called an extraordinary meeting of the Company's shareholders for Monday, April 8, 2013, for shareholders to vote on the board's proposed capital increase, among other matters. It also informed the regulator that the board had agreed to register a line of bearer bonds targeted towards the general market for up to UF 3 million with a maximum maturity of 25 years. Grupo Security also called an ordinary shareholders' meeting for April 30, 2013, to propose a dividend of Ch$7 per share. Together with the interim dividend of Ch$1 per share and the additional dividend of Ch$2.25 per share already paid on October 25, 2012, this gives a final dividend of Ch$10.25 per share for the year 2012, which is equivalent to 63% of profit for 2012, thus maintaining Grupo Security's traditional dividend policy.
Grupo Security is a diversified financial group that offers its customers exceptional service and comprehensive solutions to their lending, asset management, insurance, travel and real estate needs. The group seeks to meet the needs of its customers, shareholders, employees and the world in which it does business, while encouraging work-family balance.