Metropolitan Bank & Trust Company (Metrobank) posted an audited consolidated net income of P28.1 billion in 2019, representing a 27% increase year-on-year.
Metrobank’s solid performance resulted from the consistent improvement in operating revenues on the back of moderate loan growth and margin expansion, strong trading and FX gains, double-digit increase on fee-based income, and manageable cost growth.
“The Bank performed significantly well in 2019, and all our initiatives contributed to the strong finish,” said Metrobank President Fabian Dee. “Our increased profitability, more efficient operations, and sustained business growth are the direct result of our continued mission to deliver what is meaningful to our customers and validates their trust and confidence in our Bank,” he added.
Metrobank grew CASA deposits by 12%, driving overall robust deposit growth of 10% to P1.7 trillion. As such, the Bank closed 2019 with an improved 63% CASA ratio, providing liquidity to support loan growth of 7% to P1.5 trillion. Aligned with continued Philippine economic expansion, the rise in credit demand was driven by the commercial segment’s 7% increase as well as sustained consumer lending growth led by the 23% jump in the credit cards business.
In 2019, the Bank’s net interest income expanded 12% to P77.0 billion, accounting for 72% of the Bank’s total revenues of P106.9 billion, bringing net interest margin to 3.84%.
Meanwhile, non-interest income rose 26% to P29.9 billion, benefiting from higher customer flows in fixed income and foreign exchange, on top of a favorable financial market environment. Service fees and commissions grew 12% to P14.3 billion, while trading and FX gains more than tripled to P9.3 billion.
With the Bank’s continued focus on improving efficiency and productivity, operating expense grew at a manageable level of 8%. This, coupled with relatively strong revenue growth for the period, led to an improvement in the cost-to-income ratio to 55% from 58% in 2018.
Modest portfolio growth ensured adherence to the Bank’s credit standards and sustained better-than-industry asset quality metrics, with non-performing loans (NPL) ratio at 1.3% from 1.5% last September 2019. The Bank allotted P10.1 billion provisions for credit and impairment losses, further improving NPL cover to 103% from 96% last quarter.
Metrobank’s consolidated assets and equity stood at P2.5 trillion and P309.6 billion, respectively. Total capital adequacy ratio was at 17.5% with Common Equity Tier 1 ratio of 16.2%, comfortably above regulatory requirements.
Latest Developments
In January 2020, the merger of wholly-owned subsidiary Metrobank Card Corporation (MCC) into Metrobank was approved by the Philippines Securities and Exchange Commission (SEC). This transaction will unlock the value of MCC and help realize the following objectives: (1) improve synergy and cross-sell, (2) increase profitability and improve capital efficiency, and (3) enable Metrobank to be more competitive in the credit card business. MCC is a leading provider of credit cards in the Philippines with about 1.5 million cards-in-force based on data from the Credit Card Association of the Philippines (CCAP).