Metrobank posts 2.89% drop in 2016 net income

Ty family-led Metropolitan Bank and Trust Co. booked a 2.89-percent decline in net profit last year to P18.1 billion due to slower-than-expected growth in interest earnings, lower profit from the sale of foreclosed assets and higher loan loss provisioning.

But for the fourth quarter alone, Metrobank’s net profit rose by 3 percent to P5.5 billion, the bank said in a statement.

Metrobank’s full-year results translated to a return on equity of 9.28 percent, lower than the previous year’s 10.83 percent.

In a research note, COL Financial said the decline in Metrobank’s full-year net profit had resulted from a weaker-than-expected growth in net interest income and the higher-than-expected provisioning.

The banking group’s provision for credit and impairment losses last year increased by a hefty P5.28 billion or 256.58 percent to P7.34 billion.

Net interest income rose by 8.11 percent to P52.95 billion as the bank expanded its loan book while generating low-cost funds.

Total resources peaked at P1.9 trillion while total deposits reached P1.4 trillion and total loans hit P1.1 trillion – all reaching record high levels.

Metrobank said its 2016 performance was driven by sustained low-cost funds generation, which supported the rapid expansion of commercial loans. Last year, the bank grew its loan book faster than industry and strategically re-positioned its balance sheet to provide a steady source of recurring income.

The bank grew its loan book by 20 percent to breach the P1 trillion mark. The total loan portfolio of P1.1 trillion accounted for 57 percent of total assets versus 50 percent in the previous year.

The commercial segment led the lending growth, rising 22 percent year-on-year as the bank supported the long-term capital expenditure requirements of its corporate clients and the working capital needs of the middle market and small and medium enterprise (SME) customers. The consumer segment maintained a growth of 16 percent, with auto loans growing fastest among the bank’s consumer assets.

The bank’s low-cost deposits sustained a high growth rate of 21 percent to reach P846 billion. Low-cost deposits—referring to current account and savings accounts—accounted for 61 percent of total deposits, up from 56 percent a year ago, providing the liquidity to support loan growth.