Metrobank Q1 profit down 11%

Ty family-led Metropolitan Bank and Trust Co. chalked up a net profit of P5.08 billion in the first quarter, 10.66 percent lower than the income recorded in the same period last year, during which earnings were beefed up by an extraordinary gain from an asset sale.

Taking out the impact of the non-recurring gain, Metrobank reported an increase in core income of over 50 percent.

“We are pleased with this quarter’s performance, particularly the sustained momentum in our core business. The bank delivered strong volume growth, increased contributions from fee-based income and trading-related activities, as well as better cost management,” Metrobank president Fabian Dee said in a statement.

Net interest income increased by 4.53 percent year-on-year to P11.7 billion on the back of a double-digit year-on-year growth in volumes. Loans and receivables were up 19 percent year-on-year to P743.8 billion, surpassing the industry’s reported average loan growth of 13.7 percent.

“This reaffirms Metrobank’s strong leadership position in the commercial segment for over five decades,” the bank said.

On the funding side, deposits increased by 18 percent year-on-year to bring the bank’s total deposit base to P1.2 trillion.

Non-interest income for the period included P2.7 billion in bank commissions, service fees and income from trust operations as well as P2.3 billion in trading and foreign exchange gains. Combined, this was 52 percent higher than the level seen in the same period last year. The bank booked a 162.08-percent surge in net treasury gain, particularly from the trading of fixed income securities and foreign exchange transactions.

The item that weighed down this quarter’s earnings was miscellaneous income, which shrank to P1.8 billion in the first quarter of 2015 versus the P5.99 billion income for the same period in 2014.

This was attributed by the bank to last year’s profit realized from the sale of bank-owned property as well as real estate and property assets to Federal Land, Inc., a related party, alongside divestments of non-core assets.

Meanwhile, operating expenses were kept in check at P9.8 billion, about the same as last year’s recurring expense level.

By completing a series of non-core asset divestment and capital-raising exercises, Metrobank is now prepared for new Basel 3 capital adequacy regulations.

Basel 3 introduced a complex package of reforms designed to improve the ability of banks to absorb losses. It also extended the coverage of financial risks and put in place stronger firewalls against periods of stress.

For its part, Metrobank completed last April a P32-billion stock rights offering, intended to enhance the bank’s capital ratios and provide adequate buffer to pursue its medium-term strategy and growth plans.

“We are confident that our strong capital position coupled with recent initiatives to improve coverage, systems, and service delivery will enable us to take full advantage of Philippine growth opportunities,” Dee said.

On asset quality, non-performing loans (NPL) as ratio of total loans were kept at 1.3 percent compared to 1.4 percent as of the same period last year. The bank also reported lower provisions for credit and impairment losses at P898 million. Doris Dumlao-Abadilla