Ty family-led Metropolitan Bank & Trust Company (Metrobank) grew its first quarter net profit by 5.3 percent to P5.9 billion as the bank expanded core lending activities and improved its margins.
This performance translated to a return on equity for the group at 11.26 percent compared to 11.26 percent in the same period last year.
“We have started the year on the right direction and we are moving forward as planned. Our recently completed capital raise (P60 billion) reflects our continued optimism on the prospects of the economy. This positive backdrop together with our growth strategy should allow us to achieve our targets for the year and sustain our momentum in the medium term,” Metrobank president Fabian Dee said in a press statement on Friday.
Metrobank attributed its first quarter performance to sustained growth in core business, as double-digit growth in loans and low-cost deposits contributed to better margins, while recurring expense growth was kept at a manageable level.
Despite the volatile market conditions, loans grew by 14 percent year- on-year to P1.3 trillion. The consumer portfolio maintained its growth of 17 percent, while the commercial segment grew by 14 percent year-on-year with key contributions from middle market and small and medium enterprises as well as top corporate accounts.
Net interest margin for the period was at 3.8 percent, which is 7 basis points higher compared to the first quarter 2017. As a result, Metrobank booked P16.1 billion in net interest income, up by around 11 percent year-on-year. Net interest income accounted for 73 percent of the bank’s total revenue of P22.1 billion.
Meanwhile, the non-interest income of P6.0 billion was comprised of P3.2 billion in service fees and commissions and income from trust operations, which went up by 9 percent. The bank also booked P679 million in net trading and foreign exchange gains alongside P2.1 billion in miscellaneous income, in turn coming from asset sales, leasing and dividend earnings.
On the funding side, total deposits increased by 9 percent to P1.6 trillion, driven by the 11-percent growth in the low-cost component. Low-cost deposits accounted for 62 percent of the bank’s deposit base.
Operating expenses, excluding taxes and licenses, were kept at single-digit growth, up by 9 percent to P10.0 billion. Manpower-related costs grew relatively slower at 7 percent to P4.8 billion. Taxes and licenses were reported at P2.2 billion, inclusive of tax related adjustments.
Metrobank ended the first quarter with consolidated assets of P2.1 trillion, and equity of P206.9 billion. Total capital adequacy ratio was at 14.5 percent with common equity tier 1 ratio at 12 percent.