Metrobank sees 10% profit jump in ’06

Metropolitan Bank & Trust Co., the country’s biggest lender, expects profit to rise at least 10 percent in 2006, boosted by higher income from loans and treasury operations, its top executive said yesterday.

This year, the bank may meet its P4.5-billion profit forecast, Metrobank president Antonio Abacan said. The bank had P3.6-billion net income last year. For the first nine months of 2005, profit rose 21 percent to P3.2 billion.

"We will just keep on punching," Abacan said. "We won’t just put our gloves down."

Metrobank will sell as much as P15 billion of bad loans, those at least 90 days overdue, and non-performing assets next year through auctions, Abacan said. This year, the bank has sold about P9.8 billion of bad loans, he said.

Metrobank is planning to unload between P8 to 10 billion worth of non-performing assets next year.

"We will have a very strong balance sheet next year with the disposal of non-performing loans, so we will be able to increase our loan portfolio," said Abacan, who spoke at the launch of a bond sale by Development Bank of the Philippines. Metrobank’s unit, First Metro Investments Corp., is one of the three banks hired to help sell the debt.

Since the tax incentives under the Special Purpose Vehicle (SPV) Law expired last April, banks have been forced to sell their bad assets based on market valuations which is more profitable for banks since they are getting higher-than-market rates on auctions and bulk sales of bad assets.

But the Bankers Association of the Philippines (BAP)continues to seek amendments to the SPV Law extending the incentives by another two to three years.

Metropolitan Bank will also sell $125 million of debt early next year to boost funds for loans, investment and expansion, Abacan said, without giving details.

The bank will set aside between P2.5 billion to P3 billion as provision for losses from loans and investment by year-end, he said.

Metrobank shares have risen 24.5 percent this year, more than the 15.1-percent gain of the main stock index. The stock closed unchanged yesterday at P33. — Ted Torres