Metrobank’s Q1 profit down 9.3% on higher loan loss buffer

Metropolitan Bank & Trust Co. chalked up P6.1 billion in net income for the first quarter, down by 9.3 percent year-on-year, on higher provisions made for possible credit losses given the challenging environment caused by the COVID-19 pandemic.

Metrobank set aside P5.04 billion in loan loss provision for the first quarter, more than double the P2.4 billion buffer booked in the same period last year.

“Our underlying business is strong. We started the year with healthy growth in loans, deposits and other revenue streams,” Metrobank president Fabian Dee said in a press statement on Thursday.  “However, current conditions point to an expected slowdown in the business environment and challenges ahead.  Mindful of the potential impact of this pandemic, we decided to take the prudent approach of increasing provisions to cover anticipated risks.”

Net interest income after provision for credit and impairment losses rose by 4.32 percent year-on-year to P16.38 billion in the first quarter.

The increase in interest earnings was driven by the 6 percent expansion in the net loan book to P1.4 trillion, supported by the 8 percent growth in deposits.

“We have weathered periods of crisis in the past and we are confident that we are well prepared, as the bank has one of the strongest capital positions in the industry. We will continue to adjust our processes to ensure the sustained delivery of meaningful banking services; and implement the necessary measures to keep both our customers and our people safe,” Dee noted.