Metropolitan Bank & Trust Co. (Metrobank) reports net income grew by 46% to P16.1 billion in the first nine months of 2021. Earnings surged 131% to P4.4 billion in the third quarter of 2021, with proactive NPL management resulting in lower provisions. Healthy fee and other income and controlled operating expense growth contributed to the positive earnings performance.
“Our strategy to build a stronger balance sheet has given us the capacity to withstand prolonged risks and also enabled us to implement strategies to optimize our operating performance in the medium term,” says Metrobank President Fabian S. Dee. “We will continue to help economic recovery as we see a gradual increase in lending activities, as businesses are more able to adapt to the pandemic,” adds Mr. Dee.
Total operating income reached P75.9 billion in the first nine months. Net interest income continues to improve from last quarter, as net interest margin has started to stabilize at 3.4%. The sequential quarterly pick-up in corporate and credit card loans has also been sustained. Funding costs were also stable, supported by a 13% growth in low-cost current account and savings account (CASA) deposits as clients continued to park their excess liquidity with Metrobank. CASA ratio remained high at 74.9%.
Fees and other non-interest income rose by 20% to P15.2 billion in the first nine months, reflecting higher transaction volumes and cross selling initiatives. On the other hand, operating costs were marginally up by 1% at P44.4 billion. These favorable trends mitigated the impact of weak trading income.
Provision expenses declined by 72% to P10.0 billion as Metrobank’s portfolio health improved, with NPL ratio further easing to 2.1%, well below the industry’s 4.5% in September 2021. Likewise, restructured loans ratio at 0.8% is much lower than the industry ratio of 3.1%. As such, NPL cover has increased to 191%.