UBS said the estimate was based on a P50,000 square meter market price of the 10.4-hectare property Metrobank had seized from Metro Pacific in December last year as payment for the latter’s P2.4-billion debt.
The property located in the northern portion of the Bonifacio Global City includes 12 condominium units at the Pacific Plaza Towers.
"With property developers like Ayala Land priming property sales in Fort Bonifacio, we expect material gain on Metrobank’s asset sale this year. Land sales at the fringes of the commercial business district fetch market prices of P50,000 square meters," UBS said in its research report.
With the possible sale of the Fort Bonifacio property, UBS said Metrobank’s property-linked bad assets could fall 13 percent this year. Philippine banks have been selling foreclosed real estate properties at a discount to clean up their books and boost their lending portfolio.
According to UBS, Metrobank had raised P2 billion from the sale of foreclosed assets in 2004, up 66.7 percent from the previous year’s P2 billion.
UBS said it expects Metrobank to post higher gains in 2005 and 2006 on brisker retail sales of foreclosed assets and increased lending activities.
Metrobank is seen to post a net income of P4.01 billion this year or an increase of 12 percent from the P3.6 billion reported in 2004. This is seen to grow further to P4.41 billion. In lieu of this, UBS has upgraded its price target for Metrobank from P34 to P42 each share.
"Metrobank has traded below book value for two years on asset quality concerns. We estimate that two-thirds of its NPAs are foreclosed assets and NPLs to the real estate sector. A pickup in the real estate sector should diminish Metrobank’s asset quality risk, in our view," UBS said.
"Assuming sales levels return to the 1994-1997 levels, we estimate that the banking industry can liquidate over four years assuming the median sales between the current and peak sales," UBS said.
"After raising subordinated notes in 2002, we estimate that Metrobank is in a comfortable position to grow its risk-weighted assets. It has a capital adequacy ratio of 17 percent versus the minimum requirement of 10 percent. We estimate that it has the largest excess capital of over the minimum requirement at $413m among the banks and is well-positioned to gain market share on an upcycle," UBS said.
Headquartered in Zurich and Basel, UBS employs more than 66,000 people, and has operations in over 50 countries and in all major financial centers.
In Australia, where it is a market leader, UBS is a financial intermediary divided into three business groups: Investment Banking (corporate, government and institutional clients), Wealth Management (private clients) and Global Asset Management (institutional funds management).
Metrobank is controlled by taipan Goerge Ty who also has interests in investment banking, real estate, power generation, car manufacturing and retailing and insurance.
It plans to raise about P12.95 billion from the issuance of up to 350 million new shares to shareholders. The shares will come from the bank’s authorized capital stock and will be priced at a zero to 10 percent discount to either the closing price on the trading day preceding the pricing date or the weighted average price of the shares in the last 10 trading days.
Metrobank is targeting a 15 to 20-percent increase in its remittance business this year as it further expands its presence in other countries like Europe, United States and Singapore. The bank plans to acquire a remittance firm in Italy that has five branches.
It is also eyeing a remittance company in Spain with two branches.
Metrobank earlier secured the approval of the Central Bank to set up three more branches in Japan. It plans to open a branch in Nagoya in the first quarter of 2005.
Through its partnership with Indonesia’s Bank Central Asia, Metrobank provides remittance services to Indonesians working in Taiwan. It is the first and only Philippine bank authorized to operate in Taiwan where it has three branches.