The Philippine banking sector remains stable, bolstered by strong profits from the nation’s second largest largest bank.
Metropolitan Bank & Trust Co.’s (Metrobank) net earnings rose by 31.3% to PHP10.5 billion in the first quarter of 2023 from a year ago. The Bank’s robust growth was propelled by the combination of the expansion of its lending portfolio, higher margins, and healthy fee income amid improved asset quality.
This translated to a 13.1% return on equity, higher than the 10.3% recorded in the same period last year.
“Metrobank’s solid performance in the first three months of the year reflects our continued efforts to capture opportunities of a growing economy while we strive to keep our balance sheet strong against risks of volatile market conditions,” said Metrobank President Fabian S. Dee.
“For the rest of the year, we will continue making progress in further improving our products and services and implement strategies in line with our promise of keeping our customer in good hands,” he added.
The Bank’s net interest income surged by 28.8% to PHP24.9 billion, lifted by higher loans and a 54-basis point hike in net interest margin to 3.9%. Gross loans increased by 12.5% year-on-year, driven by a 12.7% rise in commercial loans and 11.8% expansion in consumer loans.
Our consumer loans business was mainly driven by a 30.0% growth in net credit card receivables and 10.7% rise in auto loans.
Meanwhile, total deposits grew by 10.8% to PHP2.3 trillion from a year ago, of which low-cost Current and Savings Accounts (CASA) accounted for 62.1%.
Trading and FX gains stood at PHP2.1 billion, while fee income rose by 13.4% to PHP4.1 billion.
The Bank’s operating expenses jumped by 13.5% to PHP16.9 billion on the back of higher taxes, technology spending, and transaction-related expenses. The strong revenue growth, nonetheless, offset the impact of rising expenses, thus improving the cost-to-income ratio to 51.6% from 54.1% from the year before.
As a result, pre-provision operating profit increased by 26.4% to PHP 16.1 billion.
Metrobank’s non-performing loans (NPLs) ratio further eased to 1.8% from 2.2% in the same period last year. Moreover, NPL cover further improved to 189.3%, solidifying the Bank’s buffer against any risks to the portfolio.
Metrobank’s total consolidated assets stood at PHP2.9 trillion, maintaining its status as the country’s second largest private universal bank. Total equity stood at PHP320.0 billion.
The Bank’s capital ratios remain to be one of the highest in the industry, with capital adequacy ratio at 17.6% and Common Equity Tier 1 (CET1) ratio at 16.8%, all well-above the BSP’s minimum regulatory requirements. In addition, Metrobank’s Liquidity Coverage Ratio (LCR) is substantial at 237.8%
In the first three months of the year, Metrobank received several recognitions here and abroad. Metrobank was named as the Best Domestic Private Bank in the Philippines and the Best Bank for Ultra-High-Net-Worth at the 2023 Asiamoney Private Banking Awards. It was also recognized as the Best Service (Asian Bank) for the Philippines, according to the 2023 Asiamoney Trade Finance Survey. The Bank also received six awards at the recently held 2023 PDS Awards for its outstanding performance, leadership, innovation, and overall contribution to the growth and development of the Philippine financial markets.