Metrobank to bid out P5-B NPLs

The Metropolitan Bank and Trust Co. (Metrobank) is planning to bid out P5-billion worth of non-performing loans (NPLs).

Metrobank president Antonio Abacan Jr. said the bank is more focused on lowering its NPLs rather than looking for a bank to gobble up or buy.

"We are comfortable with our current position in the banking industry. We are not looking at any bank," the bank official said.

Metrobank in the country’s largest bank in terms of assets with P461.2 billion as of end-March 2005.

Recently, Ayala-run Bank of the Philippine Islands, Metrobank’s close contender in the number one slot in the banking industry, bought Prudential Bank. Banco de Oro, ranked seventh in the industry, is also consolidating its shares in the Equitable PCI Bank. Allied Banking Corp. of taipan Lucio Tan is reportedly eyeing to consolidate with Philippine National Bank after the businessman’s group cornered majority stake in the former state-owned bank.

Abacan said they are currently working out the bidding of P5-billion worth of NPLs. Earlier, he said they have already sold P2.7 billion NPL to US-based Avenue Asia Capital Group.

So far, he said there are at least four entities that have signified interest to participate in the bidding of the distressed assets of Metrobank.

The bank executive identified only three of the four prospective bidders. They are: Deutsche Bank, Avenue Asia and ADM Investors Services Inc.

At present, the bank’s NPL level stood at 10.5 percent. The bank expects to trim the level of its bad loans to single digit level within the year.

According to Abacan, they also expect to meet the P4.5-billion income target for this year.

"We are within target. In fact, the first semester of the year, we have attained 50 percent of our earnings target," he said.

The bank has also set aside about P4 billion for its loan loss provision.

In a report to the Securities and Exchange Commission (SEC), Metrobank said it posted an unaudited net income P2.25 billion for the first semester of 2005, 30.36 percent higher than P1.73 billion net income booked in the same period in 2004.

The NPL ratio of the bank improved to 11.36 percent as of June 2005 from 13.02 percent as of June 2004. This represents ratio of the group’s NPLs to its gross loan portfolio, including interbank loans receivables.

Its capital adequacy ratio (CAR) went down to 16.21 percent as of June 2005 from 17.3 percent as of June 2004. The CAR, expressed as a percentage of the total qualifying capital to risk-weighted assets of the group, determined in accordance with existing guidelines prescribed by the Bangko Sentral ng Pilipinas, should not be less than 10 percent for both the parent company and the group.