Earnings of Metrobank halved in Q1

Local banking giant Metropolitan Bank and Trust Co. halved its net profit year-on-year to P5.7 billion in the first quarter in the absence of larger trading gains and extraordinary earnings from asset sale that bloated last year’s level.

The decline in first-quarter net profit was in line with the industry-wide drop in trading gains compared to last year, but still included some one-time gains from a property sale and divestment of non-core assets. With its results in the first three months, Metrobank beat the P5.5-billion bottomline (-46 percent down year-on-year) reported by Banco de Oro Unibank and the P3.6 billion (-57 percent) posted by Bank of the Philippine Islands.

In a press statement, Metrobank said the key performance driver for the first quarter was the double-digit increase in core revenues, in turn fueled by sustained volume growth in loans and deposits.

Total operating income for the period hit P20.1 billion, of which P11.1 billion represented net interest income and P9 billion consisted of non-interest income.

On the funding side, total deposits increased by 50 percent to breach the P1-trillion mark by the end of the quarter. This supported the 19 percent expansion in the loan book to P623.5 billion, with the commercial loan portfolio leading the growth at 21 percent year-on-year, the bank reported.

Net interest margin held steady at 3.9 percent.

Non-interest income in the first quarter of 2014 included P2.1 billion in fee-based income, and P900 million in trading and foreign gains. Income from trust operations, on the other hand, improved by 37 percent to reach P300 million.

Miscellaneous income was reported at P5.7 billion, boosted by asset disposals which are consistent with Metrobank’s capital planning initiatives under the new Basel 3 regime that in turn requires stiffer capital adequacy ratios.

In the comparative period in 2013, the bank’s miscellaneous income included the gain on sale of the remaining 15 percent stake in Toyota Motors Philippines Corp.

On the expenditure side, Metrobank’s total operating expenses for the first quarter was reported at P10.3 billion while provisions for credit and impairment losses amounted to P1.2 billion.

In terms of asset quality, non-performing loans (NPL) as a ratio of total loans further improved to 1.4 percent from 1.8 percent as of the same period last year, while NPL coverage was now at 155 percent from 124 percent previously.

Metrobank said it had likewise continued to pursue its branch expansion strategy to improve coverage and customer accessibility. It opened five branches and 15 automated teller machines in the first quarter, bringing the consolidated network to 861 and 1,951, respectively.

The banking arm of the Ty family was recently upgraded by Fitch Ratings to investment grade status. Its long-term issuer default rating was raised to BBB- from BB+, with a stable outlook. This was the second investment grade rating it received following the first upgrade in 2013.

Metrobank ended the first quarter with consolidated assets reaching P1.4 trillion and equity at P136.5 billion. Total capital adequacy ratio remained the regulatory limit at 16 percent. Doris C. Dumlao