Metrobank puts off rights issue due to weak market

Metropolitan Bank and Trust Co., the country’s biggest bank network, is putting off its planned stock rights offering until market conditions improve.

In a disclosure to the Philippine Stock Exchange (PSE), Metrobank said it would wait for its share price to improve before conducting the rights offering to ensure it is "acting in the best interest of shareholders and to avoid any confusion in the market."

Metrobank said its share price has fallen 17.3 percent since March 1 due to poor market conditions. Shares of Metrobank closed at P31.50 last Friday.

"Fund flows have turned negative in March and April after being positive for 11 consecutive months until February," the bank noted.

Metrobank added it "could not fix the record date at this point because such action would effectively lock in into proceedings with a rights offering immediately."

Nevertheless, Metrobank said it has been in continuous discussions with its investment house subsidiary First Metro Investment Corp. to determine the ideal time to proceed with the rights offering.

Metrobank’s planned rights offering was targeted for late April or early May this year.

The PSE approved last month the bank’s planned issuance of up to 350 million shares through a stock rights offering to shareholders. The shares will come from its authorized but unissued capital stock and priced at zero to 10- percent discount to either the closing price on the trading day preceding the pricing date.

The bank said it hopes to raise between $200 million and $300 million from the offering, which will be used to optimize funding mix to enhance profitability, support anticipated loan growth, and increase provisioning levels.

Metrobank, the country’s largest bank in terms of assets, is expecting its net profit to rise by as much as 17 percent this year with higher corporate and consumer lending. Net profit is seen to reach P4 billion to P4.2 billion this year on steady growth in loans and the sale of foreclosed assets.

For the first quarter this year, Metrobank’s net profit jumped 53 percent to P1.2 billion from only P665 million the previous level. Its net profit was P3.6 billion for the whole of 2004.

Metrobank expects loan portfolio to grow between five to seven percent on gains from consumer and corporate lending, while some P2 billion worth of foreclosed assets are scheduled to be sold this year.

The bank is currently in talks with asset management firms for the sale of some of its bad loans and assets. Last year, Metrobank sold P1.7 billion worth of foreclosed assets.

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, the United States and Singapore. It earlier secured the approval of the Bangko Sentral to set up three more branches in Japan.

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.