Makati—(PHStocks)—Metropolitan Bank & Trust Company (Metrobank, PSE: MBT) reported PhP7.4 billion in consolidated net income for the first half of 2012, representing a 21 percent growth from the PhP6.1 billion earned in the same period last year. The strong performance for the semester was attributed to the healthy growth in core revenues coupled with the rationalization of operating expenses.
Total operating income earned for the first six months of the year increased by 15 percent to PhP29.1 billion from PhP25.4 billion in the same period last year. Net interest income grew to PhP15.3 billion from PhP14.7 billion, on the back of the 16 percent hike in the gross loan portfolio and a more favorable funding mix. Funding cost further improved as low cost deposits now account for 56 percent of the total deposit base from 48 percent last year, while demand for credit was primarily led by the corporate and consumer segments.
Non-interest income rose 30 percent to PhP13.8 billion from PhP10.7 billion previously, driven by sustained growth in fee-based income, higher contributions from associates, and strong treasury and investment activities. Service charges, fees and commissions amounted to PhP4.1 billion from PhP3.9 billion, while income from trust operations grew 38 percent year-on-year to PhP0.4 billion. Share in net income of associates came in at PhP1.4 billion from PhP0.5 billion, on account of higher income generated by various associates. Trading and foreign exchange profits reached PhP6.1 billion, from PhP4.1 billion in the same period last year.
Operating expense growth slowed down from the first quarter this year. For the first six months of 2012, operating costs increased by 9 percent to PhP16.3 billion. In line with the overall business growth, manpower and occupancy-related expenses increased to support the network expansion and initiatives for improved sales coverage. As operating income expanded faster than costs, Metrobank’s pre-provision operating profit rose 23 percent year-on-year to PhP12.9 billion, from PhP10.5 billion previously.
Asset quality remained in check even with the continued business expansion. The nonperforming loans (NPL) ratio stood at 2.2 percent, from 2.6 percent in the first half of 2011, or an absolute reduction of PhP0.4 billion year-on-year. The Bank set aside provision for credit and impairment losses amounting to PhP2.5 billion, pushing NPL coverage to 109 percent from 95 percent in the comparative period last year.
As at end-June 2012, Metrobank had PhP942.8 billion in consolidated assets and retained leadership in total equity at PhP111.2 billion. Total capital adequacy ratio further improved to 18.5 percent with Tier 1 capital ratio at 14.5 percent.