The Market Monitor Minding the Nation's Business
By Jerry Maglunog
Metropolitan Bank and Trust Company (Metrobank) has been named the Strongest Bank in the Philippines in The Asian Banker 500 (AB 500) Strongest Bank by Balance Sheet Ranking 2015.
Metrobank ranked ninth overall in Asia, which marks the first time that a Philippine bank has made it to the Top 10 list. The AB 500 is an evaluation of the 500 largest banks in the Asia Pacific region for the financial year 2014.
The AB 500 Strongest Banks by balance-sheet ranking is the most comprehensive annual evaluation that captures the quality and sustainability of the balance sheets of banks in the region. It tracks the relative financial strengths of banks in response to their respective market conditions, based on a common scorecard. The Asian Banker cited the overall sustained performance from Metrobank, which saw it achieve impressive results in balance-sheet strength while maintaining good figures in asset quality and profitability.
“We are very proud to be named the strongest bank in the Philippines, and to be recognized in the same league as some of the leading banks across the Asia Pacific region. Our efforts continue to focus on delivering long-term sustainable growth while at the same time, maximizing the use of capital, sustaining prudent balance-sheet growth, and maintaining our superior asset quality,” Metrobank President Fabian Dee said.
Among the Top 10 banks in the region, Metrobank garnered the highest score in terms of risk profile, which included among other criteria, a bank’s capital adequacy ratio (CAR). Metrobank ended the third quarter with an equity base of P192.4 billion, the highest among local banks, which translated to a 19.9- percent CAR and a 16-percent Common Equity Tier 1 Ratio (CET1), both comfortably above the BSP minimum requirements.
For January to September, Metrobank reported a 25-percent increase year-on-year in core earnings, with an unaudited consolidated net income of P13.3 billion.
Despite heightened competitive pressure and volatility in the interest rate environment, the bank continued to report double-digit growth in both loans and current account, savings account (CASA) as of end-September, stable margins, and realized stronger contributions from fee based-income.
With a stronger focus on low-cost deposit generation, CASA increased by 14 percent to P652.6 billion, while consolidated deposits settled at P1.2 trillion as of September 30, 2015.
The group continued to prioritize the expansion in the emerging commercial SME and retail customers, which combined increased by 19 percent year-on-year. Both segments continue to post healthy growth, supporting the 10-percent increase in outstanding net loans and receivables to P768.9 billion.
The strategy to rebalance the loans and deposits mix has offset the competitive pressures on margins. Metrobank maintained its net interest margin at 3.6 percent, one of the highest among its peer banks.
For the past three quarters, Metrobank booked P36.3 billion in net interest income, which now comprises over 70 percent of total operating income.
Meanwhile, the group reported P14.1 billion in non-interest income. This came from P7.4 billion in service charges, fees and commissions, which went up by 11 percent from last year; P1.1 billion in net trading and forex (FX) gains; and P5.7 billion in miscellaneous income.
Operating expenses continued to be under control at P29.4 billion, relatively flat to same period last year.
Asset quality remains better than industry as non-performing loans (NPL) ratio came in at 1.2 percent. For the period, the Group set aside provisions for credit and impairment losses of less than P2 billion.
Metrobank continued to pursue its coverage expansion strategy to improve customer accessibility. In the nine months of the year, the Bank opened 19 branches and installed 83 new ATMs, bringing the consolidated total to 939 and 2,183, respectively.