Metrobank @ 47: Redefining leadership

MANILA, Philippines - Exactly 47 years ago today, Dr. George S.K. Ty founded the Metropolitan Bank and Trust Co. (Metrobank), now regarded as one of the leading financial institutions in the Philippines.

Ty initially set up office in Binondo, Manila, and opened the first branch in Ylaya, Divisoria in less than a year’s time. By the end of the 1970s, Ty had established a new head office in Makati City, expanded Metrobank’s domestic network to100 branches, and branched out beyond the country to Taiwan, Hong Kong, Guam, and the United States. Metrobank was the first private Philippine bank to expand globally, and to be granted a license by the Taiwan government.

The aggressive expansion of Metrobank took place at the height of the Martial Law regime when there was consequent deceleration of growth rates in major sectors of the economy. Metrobank overcame the odds and was able to continue its development and growth by establishing two international branches alongside the opening of more branches locally.

In the 1980s, Metrobank continued to strengthen its position in the Philippine banking industry. It acquired its universal banking license from the Bangko Sentral ng Pilipinas (BSP), and was listed in the Philippine Stock Exchange (PSE). It was also during this period when Metrobank established the Unibancard Corp., partnered with Toyota Motor Corp. of Japan and Mitsui to put up Toyota Motor Philippines, and acquired majority stake in Philippine Savings Bank (PSBank).

History further proved that in addition to relentless growth, stability was also one of the strengths of Metrobank. The financial crisis that struck Asia in 1997 caused great panic all over the region. Metrobank not only remained firm and steady, but grew further to become the first billion dollar bank in the country.

Metrobank emerged even bigger and stronger after the crisis. Responding to BSP’s call for the consolidation of the banking industry, it completed the merger and acquisition of Asian Bank, Solidbank, and Global Business Bank. It also opened more foreign branches, most notably in Shanghai, China. To further strengthen its capital base, Metrobank became the first local bank to raise $325 million in capital overseas.

The 2008 financial meltdown that started in the US spread globally and took its toll on financial institutions across continents. The venerable Lehman Brothers Holdings Inc. filed for bankruptcy, exacerbating the global crisis. Having learned its lesson during the Asian crisis, the impact of the global crisis on the Philippine banking industry was less than that of the more advanced economies. The country’s financial sector pushed for better corporate governance standards and stricter risk measures. The companies that lived by a culture of risk management coped more easily with the new world order. That year attested to the adage that “bigger does not necessarily mean better.”

Metrobank, for its part, not only stood its ground but continued its expansion. It opened 80 new ATM sites and eight new branches during the period, reinforcing its stability and resiliency during the most trying times.

Growth prospect

A year after the global financial crisis that ensued, it appears that the world is on the road to recovery, albeit slowly. According to the latest World Economic Outlook (WEO) Update released in July 2009, “the International Monetary Fund reported that the world economy is stabilizing, helped by unprecedented macroeconomic and financial policy support by fiscal and monetary authorities worldwide. However, the recession is not yet over and the recovery is likely to be sluggish.”

“Across Asia, output growth performance was mixed, with more open economies – such as Taiwan and Singapore – experiencing the brunt of the global economic downturn.”

In a speech by BSP Gov. Amando M. Tetangco Jr., he reported that “Domestically, the story has been that of economic resilience. The slowdown in economic activity in the Philippines thus far has been moderate relative to that of some other economies in the region.”

This resilience has been acknowledged by ratings agency Moody’s Investors Service when it upgraded the Philippines’ credit rating by one notch, citing the country’s healthy financial system and resilience against the impact of the global recession.

More importantly, Tetangco said, “Our financial markets are showing some signs of recovery. Credit spreads have narrowed, the peso has stabilized and its volatility has decreased, and the stock market is on an upswing.”

He added that “Our banking system has remained sound and stable. The banking system’s asset base has been expanding steadily, supported by sustained growth in deposits. Furthermore, the profitability of the banking system has remained resilient, although with some moderation of late.”

As with the current domestic situation, Metrobank remains equally, if not more, resilient and optimistic. Its initiatives are proving to be effective as it remains stable and continues to pose good growth in its core banking operations. Over the last five years, Metrobank has made substantial progress in building a healthier balance sheet and a stronger capital position. It has been building its capabilities and platforms to maximize the potential of its domestic and international operations so that it can further develop low-cost deposit generation and tap pockets of opportunities amidst challenging times.

Metrobank continues to strive for consistent short-term gains for its shareholders without losing sight of the bigger plan of building an institution that is sustainable, credible, and profitable over the long-term. It is focused not only on the financial performance, but also on the quality of that performance. Overall, Metrobank remains committed to its vision to be the best bank for its shareholders and customers.

Metrobank’s winning efforts continue to be recognized by various groups and award-giving bodies, underscoring the high level of trust and confidence it has earned from both the private and public sectors.

Its most recent citations include its first ranking in financial reputation by the Wall Street Journal Asia. It was also recognized at the 2009 Corporate Governance Asia Annual Recognition Awards for the fifth consecutive year; and received the Gold Trusted Brand award from Reader’s Digest, which it has won for the sixth consecutive time.

As of the first half of 2009, Metrobank remains one of the local banking industry’s leaders in terms of assets, reaching P777.2 billion. As of end-June 2009, it is the highest capitalized bank with P70.9-billion equity. 

Metrobank has a consolidated branch network of 727 domestic branches nationwide. It also operates a network of more than 1,100 Metrobank and PSBank ATMs nationwide. The bank’s international presence includes 35 branches subsidiaries, and representative offices, 45 remittance correspondents, and over a thousand correspondent banks.