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Expecting the worst: Ty family’s Metrobank has biggest provision for bad loans among top PH banks

Metrobank of the Ty family has put up the biggest provisions for bad loans among the country’s top private banks.

Metrobank, the country’s No. 2 bank, allotted P22.781 billion in provisions as of June 2020 in anticipation of higher loan defaults in the coming months.

The bulk of these provisions, P17.741 billion, was booked in the second quarter this year when the lockdown took its toll on the economy.

Metrobank president Fabian Dee said this consistent with management’s “conservative business strategy.”

“We are very mindful of future risks that will likely impact the entire banking industry, so we are doing an early buildup of larger provisions to ensure our readiness,” he said.

Metrobank narrowly edged the country’s largest bank, BDO, which made P22.434 billion provisions for bad loans as of June 2020, with P20.2 billion booked in the second quarter.

BDO said the massive provisions were meant to strengthen its coverage ratio.

“While the bank expects an increase in the NPL (nonperforming loan) ratio, actual write-offs or losses are seen to be much less,” BDO said.

The Ayala-controlled Bank of the Philippine Islands earmarked P15 billion in provisions as of the first half this year. BPI said the “the pandemic ushers in a difficult period for consumers and businesses that could lead to potentially higher NPLs.”

Metrobank, BDO, and BPI accounted for more than half of the P104.452 billion total provisions made by the country’s top nine private banks in the country as of June 2020.

Security Bank led by Frederick Dy had the fourth biggest budget for bad loans with P11.08 billion as of June 2020.

The Aboitiz family’s Union Bank of the Philippines was fifth with total provisions of P10.254 billion as of June 2020.

Here is a breakdown of the provisions set aside by banks for bad loans as of June 2020:

1) Metrobank P22.781 billion (P17.741 billion in Q2)

2) BDO P22.434 billion (P20.2 billion in Q2)

3) BPI P15 billion (P10.88 billion in Q2)

4) Security Bank P11.08 billion (P5.3 billion in Q2)

5) Union Bank P10.254 billion (P5.199 billion in Q2)

6) PNB P8.444 billion (P5.094 billion in Q2)

7) RCBC P5.2 billion (P3.599 billion in Q2)

8) China Bank P4.8 billion (P4.388 billion in Q2)

9) East West Bank P4.459 billion (P2.204 billion in Q2)

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