TY family-led Metropolitan Bank and Trust Co. chalked up P5.08 billion in first quarter net profit, 10.66 percent lower than the same period last year in the absence of extraordinary gains from some asset sale that beefed up earnings last year.
Taking out the impact of non-recurring gains in the comparative period, Metrobank reported a year-on-year increase in core income of over 50 percent in the first three months.
“We are pleased with this quarter’s performance, particularly the sustained momentum in our core business. The bank delivered strong volume growth, increased contributions from fee-based income and trading-related activities, as well as better cost management,” Metrobank president Fabian Dee said in a press statement.
Net interest income increased by 4.53 percent year-on-year to P11.7 billion on the back of double-digit year-on-year growth in volumes. Loans and receivables were up 19 percent year-on-year to P743.8 billion, surpassing the industry’s 13.7 percent reported loan growth. “This reaffirms Metrobank’s strong leadership position in the commercial segment for over five decades,” the bank said.
On the funding side, deposits increased by 18 percent year-on-year to bring the bank’s total deposit base to P1.2 trillion.
Non-interest income for the period included P2.7 billion in bank commissions, service fees and income from trust operations as well as P2.3 billion in trading and foreign exchange gains. Combined, this was 52 percent higher than the same period last year. The bank booked 162.08 percent increase in net treasury gain, particularly from trading the of fixed income securities and foreign exchange transactions.
The item that weighed down this quarter’s earnings most was miscellaneous income, which shrunk to P1.8 billion for the first quarter of 2015 versus the P5.99 billion income for the same period in 2014. This was attributed by the bank to last year’s profit realized from the sale of bank-owned property as well as real estate and property asset to Federal Land, Inc., a related party alongside divestments of non-core assets.
Meanwhile, operating expenses were kept in check at P9.8 billion, flat compared to last year’s recurring expense level.
By completing a series of non-core asset divestment and capital-raising, Metrobank has prepared for new Basel 3 capital adequacy regulations.
Basel 3 introduced a complex package of reforms designed to improve the ability of banks to absorb losses. It also extended the coverage of financial risks and put in place stronger firewalls against periods of stress.
“We are confident that our strong capital position coupled with recent initiatives to improve coverage, systems, and service delivery will enable us to take full advantage of the Philippine growth opportunities,” Dee said.
On asset quality, non-performing loans (NPL) as ratio of total loans were kept at 1.3 percent compared to 1.4 percent as of the same period last year. The bank also reported lower provisions for credit and impairment losses at P898 million.
Meanwhile, Metrobank said it continued to pursue its branch expansion strategy to improve coverage and customer accessibility. For the first quarter, the bank opened 12 branches and installed 28 new ATMs (automated teller machines), bringing the consolidated total to 932 and 2,128, respectively.
Metrobank ended the first quarter with consolidated assets of P1.6 trillion and equity of P153.6 billion. Total capital adequacy ratio on a Basel 3 basis remained well above the regulatory limit at 16.5 percent while core capital based on common equity tier 1 ratio stood at 12.6 percent.