SECURITY Bank Corp. is looking to expand its loan portfolio by 10 percent this year, a conservative target considering the 38-percent increase in loans registered in the first quarter.

“We’re very selective on who we lend to, that’s why the target is not huge,” said chief financial officer Carlos Borromeo. “[Growing by] 10 percent is not very difficult to do.”

Security Bank had total loans of P67 billion as of end-March.

Borromeo said corporate lending will be key to expanding the bank’s loan portfolio despite the move of many big corporate borrowers to tap the fixed-income market to raise funds.

“We are still seeing a lot of demand [for loans] in the power sector,” he told reporters.

The bank previously said it was aiming for a double-digit increase in earnings this year as an expanded loan portfolio boosts interest income and treasury operations, also helping improve the bottom line.

Net income in the first quarter was P750 million, down 10 percent from the year-ago figure which includes one-off gains from asset sales. Net interest income grew 24 percent to P1.4 billion.

The bank’s deposit base expanded by 28 percent to P108 billion.

Despite the drop in earnings, Security Bank—No. 11 in asset size among the country’s more than 30 universal and commercial banks—registered probably the highest return on equity (ROE) in the commercial-banking industry in the first quarter.

Its ROE—or the rate of return on investments of common shareholders—stood at 23 percent for the quarter, up from 19 percent for the whole 2008.

Its total assets increased by 9 percent to P139.6 billion as of end-March, reflecting the 38-percent loan growth, while its nonperforming-loans ratio improved to 1.4 percent from 2.8 percent a year ago.

Early this year bank officials disclosed a plan to put up 10 more branches this year, to bring the bank’s nationwide network to 129.