Better than expected: Metrobank revenues surge 20%

Metrobank reported total revenue growth of 20 percent to P96.3 billion in the first nine months of 2020, while income before provisions grew by 41 percent to P52.4 billion during the same period.

This allowed Metrobank to set aside additional provisions for bad loans in view of the ongoing COVID-19 situation. Despite the challenging environment, the bank’s cost-to-income ratio improved to 46 percent from 54 percent previously.

While non-performing loans (NPL) have been relatively manageable, Metrobank set aside P35.4 billion in provisions for bad loans, almost five times more than the P7.8 billion provisions booked in the same period last year. As a result, the NPL cover went up to 174 percent from 96 percent previously, supportive of the bank’s conservative provisioning strategy.

“Our results are relatively strong across the board, and deposits and capital levels remain very healthy. Amidst the effects of the pandemic looming over the economy, the bank’s overall performance is better than expected.” said Metrobank President Fabian S. Dee.

“Even though non-performing assets are currently within manageable levels, our strategy is to be conservative by building reserves in case the crisis drags on,” he added.

For the first nine months of the year, Metrobank posted a net income of P11 billion. Meanwhile, deposits increased by 10 percent to P1.7 trillion, propelled by the 22 percent growth in low-cost deposits.

CASA ratio further improved to 71 percent from 64 percent a year ago. Healthy deposit growth accompanied by the 175 basis point reduction in policy rates helped ease funding cost in the first nine months of the year, driving net interest margin improvement by 20 basis points to 4.1 percent.

As the global health crisis continues to constrain economic activities, net loans and receivables contracted by 13 percent year-on-year to P1.2 trillion.

Commercial lending sustained a slowdown as clients deferred expansion plans and used excess liquidity to pay down debt obligations.

Consumer loans similarly declined amid economic uncertainty, which limited consumption to essential goods and deterred big-ticket spending.

Non-interest income rose 28 percent, lifted by robust trading and foreign exchange gains of P17.8 billion. Meanwhile service fees and commissions remained weak, declining by 10 percent primarily due to lower transaction volumes and waiver of some fees.

Metrobank is one of the strongest and well-capitalized banks in the country. The Bank believes that its robust capital position and balance sheet strength will provide ample support as it navigates through these uncertain times. Capital ratios are among the highest in the industry, with a total CAR at 19.9 percent and Common Equity Tier 1 (CET1) ratio at 19.0%, while consolidated assets stood at P2.4 trillion at the end of September 2020.

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