Easing monetary policies have trickled down to the spending habits of consumers and enterprises, allowing Ty family-led Metropolitan Bank and Trust Co. (Metrobank) to reach record-high profit in the first nine months of the year.
In a stock exchange filing on Tuesday, the country’s second-largest private bank said its bottom line had expanded by 12.4 percent to P35.7 billion, its highest recorded in the January to September period.
Net interest income climbed by 11 percent to P85.7 billion, driven by a 15.7-percent jump in car loans.
READ: Metrobank earnings reach record P35.7B in first 9 months
Commercial loans likewise jumped by 16.6 percent as companies spent more capital and built their inventories, Metrobank noted.
Nonperforming loans (NPL) eased to 1.59 percent as a ratio of total loans from 1.7 percent in the same period last year, signaling an improving asset quality.
“We look forward to the positive impact of recent regulatory measures on the banking industry alongside improving economic outlook,” Metrobank president Fabian Dee said in a statement.
Dovish cycle
The bank’s financial performance came after the Bangko Sentral ng Pilipinas had slashed the benchmark interest rate of banks by a total of 50 basis points (bps) to 6 percent.
The nine-month earnings report, however, only priced in the first 25-bp cut in August, as the second 25-bp reduction was in October.
Apart from interest rate gains, Metrobank said “favorable market developments” allowed trading and foreign exchange gains to surge by 56.4 percent to P5.6 billion.
Manpower, taxes and licenses, information technology and marketing costs caused an 11.2-percent uptick in operating cost to P57 billion.
Metrobank’s financial performance resulted in a return on equity of 12.9 percent, up from 12.8 percent previously.
As of end-September, its total assets stood at P3.34 trillion.
Metrobank chief marketing officer Digs Dimagiba earlier told reporters that they were seeing another “banner” year, driven mostly by the anticipated increase in consumer loans in the Christmas season.
Dimagiba added that improving projections on the country’s economic growth could further fuel growth in the latter part of the year.
Leading corporate loan growth
Metrobank head of consumer lending Peaches Cuenco said they also anticipated commercial and consumer loans to continue lifting the income of the bank.
Alfred Benjamin Garcia, research head at AP Securities Inc., said Metrobank was poised for another banner year, driven by the easing of monetary policies.
“One thing that we noticed is that [Metrobank] is leading the ‘Big Three’ in terms of corporate loan growth so they are best positioned to take advantage of the expected increase in borrowings for capital formation as interest rates decline further,” Garcia told the Inquirer, referring to BDO Unibank Inc. and Bank of the Philippine Islands (BPI) as the other top banks in the country.
However, although its lower NPL ratio reflected good asset quality, this also showed that Metrobank was more “conservative” in its lending activities, resulting in lower returns.
BDO and BPI ended the nine-month period with P60.6 billion and P48 billion in earnings, respectively. INQ