Metrobank ready for Basel 3

MANILA, Philippines - Metropolitan Bank & Trust Co. (Metrobank) said it is prepared to meet the new Basel 3 standards which will take effect on January 2014.

In a statement, Metrobank said over the past years, it has been implementing strategic approaches to improve its capital and financial strength.

Metrobank said it has delivered a compounded annual growth rate in net income of 37 percent over the past five years, hitting a high of P18.1 billion in the first semester of 2013.

It said the steady increase in profitability did not come at the expense of asset quality. 

In the same period, the non-performing loan (NPL) ratio has consistently improved from 3.5 percent in 2009 to 1.8 percent as of June 2013, which ranks below the industry average of 2.7 percent.

While the bank has maintained majority of its loan book in corporate accounts, in recent quarters its consumer segment has delivered above-industry loan growth to help fuel consumption demand in the Philippine economy.

At the end of the first semester of 2013, Metrobank reported the second largest consumer loan portfolio among its peers.

Total capital adequacy ratio (CAR) during the period remained above the 10-percent regulatory limit with an 18.1-percent total CAR and 15.7-percent Tier 1 CAR.

“At these levels, the bank believes it is prepared to meet the new Basel III standards which take effect in January 2014,” it said.

Metrobank recently received an upgrade to investment grade status by debt watcher Moody’s Investors Service.

“The bank’s baseline credit assessment (BCA) and Bank Financial Strength Rating (BFSR) were upgraded to Baa3 from its previous Ba1 rating,” it said.

Metrobank is the country’s premier universal bank and has the largest domestic network of 832 branches and over 1,800 automated teller machines (ATMs) nationwide, and 33 foreign branches, subsidiaries and representative offices.

The credit rating upgrade is viewed as an affirmation and recognition that Metrobank has taken the right strategic path to sustainable growth.

Metrobank is just one of two Philippine banks given the investment grade rating by Moody’s on its BCA and BFSR. This is the first investment grade rating bestowed on Metrobank by one of the three main international credit rating agencies.

Moody’s cited Metrobank’s track record of profitability and dominant presence in the domestic corporate and consumer segments. It also took into account the consistently robust capital and liquidity profiles which are reflective of the bank’s discipline and prudent and strategic approach to growth.

Moody’s further cited that the its credit metrics are comparable with other Baa3 banks in the region.

Metrobank ended the first semester with P1.2 trillion in consolidated assets and P135.6 billion in equity.

It also received a Baa3 (positive outlook) on its deposit ratings from a previous Ba1 rating. The positive outlook reflects the ratings agency’s expectation that a potential upgrade may happen in the near future, unlike in the case of a stable outlook where ratings are expected to remain unchanged.