Metrobank income fell nearly 50% in Jan-Sept

Provisions for bad loans slashed Metropolitan Bank & Trust Co.’s (Metrobank) net income by almost half in the first nine months of the year.

In a statement on Friday, the Ty-led lender said it netted P11 billion in the period, a 49.07-percent decrease from the P21.6 billion reported a year ago.

This came after Metrobank set aside P35.4 billion in provisions for bad loans, almost five times the P7.8-billion provisions booked in January to September 2019.

As a result, its NPL cover soared to 174 percent from 96 percent previously.

As of September, the bank’s NPL ratio rose to 2.25 percent from 1.52 percent in the same period a year ago.

“The increase in NPLs remains within expectations amidst a slowdown in the economy,” it said.

Despite this, Metrobank President Fabian Dee noted that the lender’s total revenues expanded by 20 percent to P96.3 billion, income before provisions grew by 41 percent to P52.4 billion, and net interest margin increased by 4.1 percent while deposits and capital levels remained healthy.

“Amid the effects of the [coronavirus] pandemic looming over the economy, the bank’s overall performance is better than expected,” he said. “Even though nonperforming assets are currently within manageable levels, our strategy is to be conservative by building reserves in case the crisis drags on.”

The 22-percent improvement in low-cost deposits supported Metrobank’s deposits, which jumped by 10 percent to P1.7 trillion.

“Healthy deposit growth, accompanied by the 175-basis-point reduction in policy rates, helped ease funding cost in the first nine months of the year, driving net interest margin improvement by 20 basis points to 4.1 percent,” Metrobank said.

Robust trading and foreign exchange gains of P17.8 billion lifted its non-interest income by 28 percent, it added. Lower transaction volumes and the waiver of some fees dragged earnings from service fees and commissions by 10 percent.

Metrobank’s total capital adequacy ratio reached 19.9 percent and its common equity tier 1 ratio settled at 19 percent. The bank’s consolidated assets stood at P2.4 trillion.

Metrobank shares decreased by 95 centavos or 2.28 percent to close at P40.75 each on Friday.