Metrobank 2011 profits hit P11B

MANILA, Philippines—Metropolitan Bank and Trust Co. grew its net profit last year by 31.9 percent to P11 billion, a record high for the local banking giant, on higher interest and fee-based earnings alongside hefty treasury gains.

In a disclosure to the Philippine Stock Exchange on Thursday, the banking arm of tycoon George Ty said last year’s performance resulted in an improvement in its return on equity to 11.2 percent from 10.3 percent in the previous year.

Operating income was buoyed by a 11.4-percent rise in net interest earnings to P29.4 billion, in turn driven by a 7.3-percent expansion in low-cost deposits and a 16.5-percent hike in its loan book despite the country’s below-trend domestic economic growth last year.

Despite fierce competition, Metrobank was likewise able to increase its net interest margin by 11 basis points to 3.5 percent as the bank expanded its earning assets while improving its funding mix.

The bank’s deposit base expanded by 4.6 percent to P681 billion while the loan book went up by 16.5 percent to P457.4 billion.

Outside of interest earnings, service charges, fees and commissions also surged by 12.5 percent to P7.7 billion while income from trading and foreign exchange was “better than expected” at P7.7 billion.

In terms of asset quality, bad loans declined to 2.2 percent as a ratio of total loans at end-2011 compared with 2.9 percent a year ago.  For every peso of soured loans, P0.99 provisions were set aside compared with P0.92 a year ago.

Total assets as of end-December amounted to P958.4 billion, up by 8 percent from a year ago.

Total equity reached P109.8 billion, about a quarter higher than a year ago.  Metrobank has the highest capitalization base among Philippine banks to date.

Capital adequacy ratio to risk assets stood at 17.4 percent compared to the minimum requirement of 10 percent while tier 1 or core capital ratio to risk assets stood at 13.7 percent.