Metrobank net profit drops 43% to P4.4 billion in 2008

MANILA, Philippines - The country’s top lender, Metropolitan Bank & Trust Co. (Metrobank), registered a 42.8-percent drop in net income in 2008 to P4.4 billion, from P7.719 billion a year earlier, the bank said in a statement.

It attributed the huge drop in earnings from lower yields in treasury activities and provisioning for its probable loss from its exposure with bankrupt US investment house Lehman Brothers.

Likewise, Metrobank said it did not avail of a temporary relief by the Bangko Sentral ng Pilipinas (BSP) regarding the reclassification of investment securities under the International Accounting Standards (IAS).

Nonetheless, the bank’s core business reported gains despite the weak economic environment.

 “We marked down all risky assets in our portfolio in 2008 and were still able to reflect a reasonable income,” Metrobank president Arthur Ty said.

He added that the bank wanted to rid itself of further baggage to move into positive ground this year. 

“We are moving into 2009 with a healthy balance sheet and strong capital position, focused on responsible growth in the right segments,” he said.

The bank’s net interest income meanwhile, expanded 7.5 percent to P23.1 billion on the back of healthy growth in low-cost deposits, as total deposits grew 10.5 percent to P585.3 billion. Operating income grew 2.7 percent to P37.4 billion.

Consolidated net loans and receivables rose 17.5 percent to P358.2 billion, while its non-performing loan (NPL) ratio fell to 4.5 percent from 5.3 percent in 2007, the lowest since the Asian crisis.

Fee-based income consisting of service charges, fees and commissions posted a robust 23.2 percent growth to P6.8 billion while operating expenses dipped 8.4 percent to P27.4 billion.

Capital adequacy ratio (CAR) stood at 13.4 percent.