FMIC income drops 76% to P1.64B in first half

MANILA, Philippines - First Metro Investment Corp. (FMIC), the investment banking arm of the Metrobank Group, reported a 76 percent drop in consolidated net income in the first six months of the year.

From P6.79 billion in the first semester of 2013, earnings fell to P1.64 billion due to lower trading gains.

FMIC chairman Francisco Sebastian said the next half of 2014 presents more opportunities for growth despite the low interest rate environment.

 “Corporates will continue to tap the capital markets and the momentum on bond issuance will be maintained until the end of the year. Financing for infrastructure, power and PPP (public-private partnership)  projects will also excite the market as seven PPP projects with an aggregate build-up cost estimate of P63 billion have already been awarded,” Sebastian said.

FMIC’s consolidated assets stood at P82.56 billion. Capital funds ended at P18.33 billion, three percent lower than the end 2013 balance of P18.95 billion.

Capital adequacy ratio (CAR) remains healthy at 18.93 percent under the Basel III capital framework, or well above the minimum 10-percent requirement.

FMIC president Roberto Juanchito Dispo said the downturn in trading gains, an industry-wide setback, continues to affect the investment firm’s profit.

 “But our core business – investment banking – contributed significantly not only in the company’s bottom line but more importantly in the capital markets. For the first six months, First Metro was involved in 77 percent of the total domestic corporate bond issuances, raising nearly P90 billion,” he said.

The Financial Markets Group produced net revenue of P955 million for the period, P2.67 billion lower than last year’s income of P3.63 billion but nine percent higher than its P877 million budget.

The Investment Banking Group generated total fee income of P288 million, P74 million or 34 percent higher than its income in the same period last year.

The group completed a total of 12 deals, including the initial public offering (IPO) of Century Pacific Food Inc.; Cebu Holdings Inc.’s P5-billion fixed rate bonds; SM Investment Corp.’s P15-billion fixed rate bonds; Cosco Capital Inc.’s P5-billion fixed rate notes facility; Pagbilao Energy Corp.’s P33.31-billion project finance; Ayala Land Inc.’s P8-billion fixed rate bonds; and National Grid Corporation of the Philippines’ P21-billion fixed rate notes facility, among others.

The Investment Advisory and Trust Group raised P16 million in advisory and trust fees, or 14 percent higher than last year’s result of P14 million.