Metrobank borrowing another P100B from domestic capital market

Ty family-led Metropolitan Bank & Trust Co. (Metrobank) is setting up a new P100-billion borrowing program through the issuance of bonds and commercial paper in order to replenish a recently completed funding program of the same size.

Metrobank recently obtained approval from its board to update its bond and commercial paper from a maximum of P100 billion to P200 billion. The issuance would be in one or more tranches with tenors of at least three months, the bank said in a disclosure to the Philippine Stock Exchange.

Diversify sources

“The objective of the program is to refinance maturing issuances and diversify the bank’s peso funding sources over the next three years while supporting the bank’s lending activities,” the disclosure said.

Metrobank set up its first P100-billion bond and commercial paper program in 2018. It was the first local bank to issue bonds under Bangko Sentral ng Pilipinas Circulars No. 975 and No. 1010, which allowed banks to tap the domestic capital market as an alternative funding source.

“The program gives the bank flexibility to issue additional bonds should there be a need to refinance maturities and expand funding of lending activities,” said Minda Olonan, Metrobank’s investor relations officer.

The bank’s first P100-billion bond and commercial program had been used up earlier this year.

Metrobank completed in June a P19-billion bond float, the seventh and final tranche of its first P100-billion funding program.

Metrobank grew its third quarter net income by 131 percent year-on-year to P4.4 billion as loan loss provisioning expense declined compared to last year, when pandemic disruptions dragged the economy into a record recession. This brought the bank’s nine-month net income to P16.1 billion, up by 46 percent year-on-year.