FMIC profit jumps by 76%

First Metro Investment Corp., the investment banking arm of the Metrobank group, grew its first-semester profit by 76 percent to P1.9 billion from year-ago level.

The profit growth was attributed to higher earnings from treasury, investment banking and trading.

First Metro president Roberto Juanchito Dispo said: “Our first-half result was supported by favorable macroeconomic conditions. The debt and equity volume for the first half reached P424 billion and First Metro accounted for P291 billion, or a market share of 70 percent.

“In 2011, total capital markets fund-raising reached P1.04 trillion and we contributed P805 billion, or 78 percent of the total funds raised,” he said.

“The second half of the year poses an even more positive backdrop for the domestic debt capital market, with the first-quarter GDP [gross domestic product] growth of 6.4 percent and the projected 7 percent growth in the second quarter,” Dispo added.

Dispo said the country’s inflation rate was at a record-low of 2.8 percent as of June while the interest rate on 25-year government securities was likewise at an all-time low level of below 6 percent. He also cited the country’s robust foreign reserves, the appreciation of the peso (against the US dollar) backed by overseas remittances and the strong earnings of the business process outsourcing sector.

For the first semester, FMIC’s treasury group posted a net income of P619 million, or 9 percent higher than year-ago level. This was driven by interest income from fixed income securities, trading gains from the sale of government securities, distribution fee income and brokering fee.

The investment banking group generated revenues of P258 million, P40 million higher than the level last year. This was attributed to various deals that included SM Prime Holdings’ P7.5-billion fixed rate corporate notes, Filinvest Land’s P11-billion fixed rate bonds, Ayala Corp.’s P10-billion retail bonds,  Ayala Land’s P10-billion retail bonds, GT Capital Holdings’ P21.6-billion initial public offering, and FP Finance (2012) Ltd.’s $200-million term loan.

FMIC’s investment advisory group posted P160 million in net trading gains and dividend income from investment in stocks. This was 3,100 percent higher than year-ago level.

The consolidated resources of the investment house stood at P75 billion as of the end of June.

Capital funds reached P14 billion, or 23 percent higher than the level at end-2011. Capital adequacy ratio stood at 27.33 percent.