Metrobank income rose 32% to P11B in 2011

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.

The growth was attributed to higher interest and fee-based earnings and 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 had resulted in an improvement in its return on equity ratio to 11.2 percent from 10.3 percent in the previous year.

Operating income was buoyed by an 11.4-percent rise in net interest earnings to P29.4 billion, which was driven by a 7.3-percent expansion in low-cost deposits and a 16.5-percent hike in its loan book which was realized 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 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.

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 to 2.9 percent a year ago.  For every peso of soured loans, P0.99 provisions were set aside compared to 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.