Metropolitan Bank & Trust Co. (PSE: MBT) reported net income grew by 28.0% to PhP11.7 billion in the first half of 2021. Despite the re-imposition of stricter quarantines, profit growth surged by 29.9% to PhP3.9 billion in the second quarter of 2021 on the back of strong recovery in fee income and lower cost base. With stable asset quality, the proactive provisioning in 2020 has proven to be sufficient to cover the Bank’s credit risks, allowing a significant reduction in provisions this year.
“With the sustained progress in vaccination roll-outs across the country, we are optimistic of the recovery of the economy. We remain driven to keep our growth momentum,” says Metrobank President Fabian S. Dee. “Our reserves already cover 179.0% of nonperforming loans (NPLs). Capital ratios are almost double the regulatory minimum and with abundant liquidity, the Bank is in a strong position to endure prolonged risks. We have the capacity and are looking forward to provide funding support to business activities that will help push economic recovery,” adds Mr. Dee.
Fee-based income rose by 16.4% to PhP6.4 billion in the first semester supported by the revival of transaction volumes. Trust income sustained its healthy 21.2% growth as assets under management expanded by 16.7%. The recovery in recurring fees helped mitigate the impact of subdued loan demand and margin pressure.
Operating costs were kept under control, even declining slightly to PhP29.4 billion in the first half of the year driven by sustained efforts to improve operational efficiency.
Metrobank’s portfolio health was stable, with NPL ratio further easing to 2.3% from 2.4% in March 2021. Restructured loans ratio was largely unchanged at 0.5%. Amid this backdrop and supported by its anticipatory provisioning strategy in 2020, the Bank managed to reduce provision expenses by 69.1% to PhP7.0 billion. NPL cover went up to 179.0% from 166.0% in the previous quarter.
Growth in low-cost current account and savings accounts (CASA) remained healthy at 13.5% to PhP1.3 trillion as clients continued to park their excess liquidity in Metrobank. CASA ratio remained high at 73.8% which helped keep funding costs steady.
Metrobank is the country’s second largest private universal bank with consolidated assets of PhP2.5 trillion as of end June 2021. Total equity reached PhP313.2 billion, leading to a formidable capital adequacy ratio (CAR) of 20.4% and common equity tier one ratio (CET1) ratio of 19.5%.