Metrobank profit drops 15.6% in Q1

Metropolitan Bank and Trust Co. (Metrobank), the biggest bank in the country, reported a 15.64-percent drop in net income during the first three months this year to P1.76 billion.

Most commercial banks reported poor first quarter income due mainly to  weak performance in the net interest income.

Metrobank said net interest income declined 4.26 percent to P4.97 billion while non-interest income increased by 26.97 percent to P4.94 billion. 

“The robust performance of non-interest income was on account of the 31.66 percent rise in bank fees and service charges to P1.58 billion, coupled with the P1.06 billion gain on sale from assets sold, and the four-fold increase in miscellaneous income to P1.17 billion mainly attributed to the revenue contribution of key subsidiaries,” Metrobank treasurer Fernand Antonio Tansingco said in a statement.

Trading and foreign currency gains also contracted 58.76 percent to P853.46 million. Total operating income for the quarter grew 9.13 percent to P9.91 billion. 

“The continued global risk aversion and rising domestic interest rates on the heels of higher inflation expectations have made trading and investment activities difficult compared to last year,” Tansingco added. 

Consolidated operating expenses grew 18.14 percent to P6.27 billion mainly from the consolidation of Global Business Power Corp. with Global Business Holdings Inc., a major subsidiary of the Metrobank Group. Parent company cost and expense growth was almost flat at P 4.08 billion. 

Metrobank officials said cost management and operational efficiency remains a key strategic objective for the bank.

“Our initiatives are focused on systems and process improvements that will support credit scoring and risk management, and strengthen the bank’s capabilities to capitalize on value investments and lending opportunities.” 

Consolidated resources reached P677.96 billion, representing a 2.2-percent increase year-on-year. Net loans and receivables grew 15.47 percent year-on year and 2.91 percent quarter-on-quarter to P313.77 billion, on the back of continued strong takeup in the consumer segment which now accounts for 21.57 percent of gross loans from 18.97 percent in the first quarter of 2007.

Deposits growth was mainly flat at P493.63 billion. However, low cost deposits increased  13.68 percent, highlighting Metrobank’s successful initiatives in managing its deposit mix. Low cost deposits now account for 46.39 percent of total deposits from last year’s 40.59 percent.   

Metrobank sold P2.08 billion in foreclosed assets for the first three months of the year.  In addition, the consolidated non-performing loan (NPL) ratio fell to 4.92 percent from 7.59 percent in the same period last year. Provisions for impairment and credit losses went up slightly to P1.16 billion.

 “This year’s outlook will be muted by the uncertainties in the US economy, the volatility in the global financial markets, as well as the inflationary concerns in the domestic economy. Amidst these challenging conditions, we believe Metrobank will remain resilient as it continues to focus its strategy on growth, efficiency, profitability, and long-term value,” Metrobank president Arthur Ty said in a press statement.

Metrobank is the Philippines’ largest bank in terms of consolidated assets, net loans, deposits, and capital, with an extensive network of 544 domestic branches, and 35 international branches and offices in 21 countries.