Metropolitan Bank & Trust Co. (Metrobank) registered a 27.1-percent growth in net income during the first quarter due to “robust” non-interest income performance, lower bad loans provision and minimal uptick in expenses.
The listed bank in a disclosure on Monday said that its profits rose to P7.8 billion in the first three months, which is higher compared to P6.1 billion in the same period last year.
Non-interest earnings grew by 28 percent to P7.9 billion year-on-year while fee-based revenues were “stable” at P3.3 billion for the period despite fewer business activities.
Trading and foreign exchange gains rose twofold to P2.9 billion in the first three months as the Treasury group realized earnings prior to the reversal of yields.
The bank earmarked P2.5 billion in provisions for nonperforming loans (NPL) in the first quarter, which is 50 percent lower year-on-year. NPL coverage was better at 166 percent from 163 percent in December last year.
Metrobank President Fabian S. Dee said during a recent stockholders’ meeting that NPL ratio could reach 5 percent by the end of this year; but the bank still awaits cues in the second half of this year. As of end-2020, the bank’s NPL ratio was at 2.4 percent.
The bank’s current account and savings account deposits, meanwhile, improved by 16 percent to P1.3 trillion in the first quarter.
“This enabled the Bank to reduce high-cost time deposits, which partly mitigated the drop in asset yields arising from the rate cuts in the past year,” Metrobank explained. “With the pandemic still on going, loan demand remained slow, and naturally, net interest income trended lower.”
Shares in Metrobank climbed by 2.27 percent, or P1, to close at P45 each amid the 0.03-percent drop for the benchmark index on Monday.
Operating expenses inched up by 1.4 percent to P14.7 billion in the first three months. The bank attributed the marginal increase to continued efforts in improving productivity and operational efficiency.
As of end-March, total assets and equity stood at P2.4 trillion and P306.6 billion, respectively. Metrobank booked a capital adequacy ratio of 19.9 percent and common equity tier 1 of 19 percent.
“We are in a strong position to withstand a resurgence in asset quality risks, and we remain vigilant even as we all continue to battle the pandemic,” Dee said.
Meanwhile, Metrobank expressed interest in the Philippine business of Citibank N.A., with Dee saying that the bank is “open to seeking opportunities that will expand the overall business.”
“The bank is currently evaluating the business case for this transaction as it anticipates a lot of other interested parties exploring the potentials of acquiring that business,” it added.
Citibank earlier announced they are ceasing local retail banking operations. Apart from Metrobank, BDO Unibank Inc. and Bank of the Philippine Islands have shown intent to acquire the business.
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