Makati–(PHStocks)–Metropolitan Bank & Trust Company (PSE: MBT) reported consolidated net income of PhP4.3 billion for the first quarter of 2012, representing a 40% increase over the PhP3.1 billion earned in the same period last year. The Bank’s pre-provision operating profit rose by 60% to PhP7.7 billion, from PhP4.8 billion previously. The strong performance was attributed to the healthy growth in core revenues and the robust increase in treasury and investment activities.
“Our solid performance for the first quarter is reflective of our long-term strategy of sustaining profitability and maintaining a healthy balance sheet. With improving economic conditions, Metrobank is well-positioned to capitalize on investment opportunities that will support core earnings growth. Moving forward, our management team will continue to push for initiatives that will drive organic growth, create value for our customers, and ultimately enhance shareholder returns”, said Metrobank president Fabian S. Dee.
For the first three months of 2012, total operating income surged by 40% to PhP16.6 billion, from PhP11.8 billion in the comparative period last year. This was on the back of a 7% growth in net interest income to PhP7.8 billion, in turn driven by the 11% hike in low cost deposits and the 18% increase in net loans and receivables to PhP456.1 billion. Double-digit credit growth was sustained across the three major segments of corporate, middle market, and consumer. Given the healthy growth in loans, coupled with improved deposit mix, net interest margin rose to 3.7%, or 18 basis points higher year-on-year.
Meanwhile, non-interest income expanded by 95% to P8.7 billion on the back of the steady growth in fee-based income as well as strong take-up in treasury and investment activities. Service charges, fees and commissions grew 8% to P2.0 billion, while trading and foreign exchange profits reached PhP5.2 billion, from the PhP1.3 billion posted last year. In addition, growth in other income was pushed by increased trust and leasing revenues, and higher contributions from associates.
Operating expenses grew 27% year-on-year to PhP8.9 billion, driven by higher manpower and occupancy-related costs. Growth in the Bank’s manpower-related expenses was primarily due to the integration of its subsidiary, MBTC Technology Inc. (MTI), as well as the headcount expansion in line with business growth and increased sales coverage. Meanwhile, an additional 42 branches and 225 ATMs were added year-on-year, bringing the consolidated network to 800 branches and 1,624 ATMs nationwide.
With its continued focus on asset quality, Metrobank’s nonperforming loans (NPL) ratio further improved to 2.2% at the end of the first quarter 2012, from 2.9% the previous year. Provisions for credit and impairment losses amounted to PhP1.5 billion, thus increasing the NPL coverage to 109.7%.
Metrobank ended the quarter with PhP909.1 billion in consolidated assets and total equity of PhP109.7 billion. Total capital adequacy ratio further improved to 18.5% from 17.5% in 1Q2011, while Tier 1 capital ratio rose to 14.3%, from 13.5% in the same period last year.