MANILA, Philippines—Metropolitan Bank and Trust Co. grew its nine-month net profit by 15.2 percent year on year to P10.22 billion on higher interest and fee-based earnings as well as hefty treasury gains earlier in the year.
For the third quarter alone, Metrobank’s net profit grew by 1.56 percent year on year to P2.8 billion due to the P1.66-billion or 88.08-percent decline in net gains from trading and foreign exchange transactions.
The nine-month performance resulted in an average return on equity of 12.2 percent.
In a regulatory filing on Monday, Metrobank reported an increase in net interest income and other operating income by 6.74 percent and 11.69 percent, respectively, to P22.98 billion and P18.01 billion.
Nine-month interest income was boosted by the 13.48-percent expansion in gross loan portfolio. Net loans and receivables grew by 11.2 percent year on year to P481.4 billion.
Interest expense on deposit liabilities declined by P1.38 billion, or 18.04 percent, as high-cost deposits dropped by 12.4 percent, curbing the impact of an increase in interest expense on bills payable and other borrowings. Total low-cost deposits reached P384.5 billion, accounting for 58.1 percent of the deposit base from 51.7 percent in the comparative period last year.
“Amid intensified market competition and declining interest rates, the bank’s net interest margin showed a marked improvement from last year,” the report said.
Non-interest income was driven by a steady growth in fee-based income, higher contributions from associates as well as earnings from treasury and investment activities. Service charges, fees and commissions went up by 6.05 percent year on year while net gain from trading and foreign exchange transactions rose by 5.61 percent to hit P6.29 billion and P6.1 billion, respectively.
The bank continued to improve on efficiency as operating expenses registered a slightly above-inflation growth from the same period last year. For the nine-month period, operating costs inched up by 5 percent to P23.6 billion. As revenue grew faster than expenses, Metrobank’s preprovision operating profit rose by 14.7 percent year on year to P17.3 billion.
As the bank continued to focus on asset quality, nonperforming loans (NPL) ratio to total loans improved to 2.2 percent in the first nine months from 2.5 percent in the same period last year. Metrobank set aside provision for credit and impairment losses amounting to P3.4 billion.
Metrobank ended the third quarter with P953.7 billion in consolidated assets and total equity of P114.4 billion. Total capital adequacy ratio (CAR) to risk assets was at 18.3 percent with core or tier 1 CAR at 14.3 percent.