MANILA, Philippines - Metropolitan Bank & Trust Co. has extended a P5 billion loan to the flagship wireless arm of Philippine Long Distance Telephone Co. (PLDT).
In a statement, Metrobank said it signed a memorandum of agreement with Smart Communications Inc. for a 10-year loan facility.
Present during the signing of the agreement were Metrobank senior vice president Antonio Ocampo, Metrobank executive vice president Mylene Caparas, Smart first vice president and chief finance officer Chaye Cabal-Revilla, and Smart first vice president and treasurer Leo Posadas.
According to Smart, proceeds of the loan facility would be used to partially finance the company’s capital expenditures for service improvements and expansion programs.
Likewise, the loans would also be used to refinance Smart’s existing loan obligations.
Last month, Metrobank also extended a P5 billion loan to PLDT to partially bankroll its capital expenditures and at the same time refinance its existing financial obligations.
PLDT has raised its capital expenditures to a record P43 billion instead of P39 billion this year to upgrade infrastructure for improved network and data connectivity.
PLDT chairman Manuel V. Pangilinan earlier said expenditures is likely to stay elevated until 2016 as the company intends to further improve its services.
The company is investing heavily to expand its 3G and 4G coverage, data center capacity as well as fiber assets.
Core earnings of Metrobank jumped 30 percent to P9.3 billion in the first half on the back of double-digit growth in both loans and deposits, stronger contributions from fee based-income, and improved efficiencies with better cost management.
On the other hand, the bank’s operating expenses were flat at P19.4 billion during the period.
Metrobank ended the first half with an equity base of P189 billion, the highest in the industry, and reported total assets of P1.6 trillion.
It reported a 20.3 percent Capital Adequacy Ratio (CAR) and a 16.3 percent Common Equity Tier 1 Ratio (CET1), comfortably above the 10 percent minimum requirement of the Bangko Sentral ng Pilipinas (BSP).
Asset quality remains better than industry as non-performing loans (NPL) ratio came in at 1.2 percent from a year-ago level of 1.3 percent. The bank reported provisions for credit and impairment losses of P1.9 billion.