METROPOLITAN Bank & Trust Co. (Metrobank) saw its net profit climb by 27.1% in the first quarter on strong non-interest income and stable asset quality, even amid the pandemic.

The bank’s net profit attributable to equity holders of the parent company was at P7.83 billion in the first quarter, up from the P6.1 billion booked in the same period in 2020, Metrobank said on Monday.

This translated to a return on average equity of 9.87%, up from 7.98% in the same period last year, while return on average assets also inched up to 1.29% from 1.01%.

The bank said the growth in its net profit was driven by the 27% climb in non-interest income at P7.9 billion against the 6.2 billion seen a year ago. Earnings from fees and other charges remained flat at P3.3 billion, income from trust fees went up by 20%, while trading and foreign exchange gains doubled to P2.9 billion.

Its net interest income, however, fell by 11.11% to P19.04 billion in the first quarter from P21.42 billion the year prior because of reduced loans.

This resulted in a lower net interest margin on average earning assets of 3.52% last quarter from 4.06% in the same period in 2020.

Metrobank’s loans and receivables stood at P1.158 trillion last quarter, down 7.58% from P1.253 trillion in the same period last year, due to muted demand for credit amid the pandemic.

Despite the decline in its credit portfolio, its non-performing loan ratio went up to 2.4% from 1.4% a year ago. The lender said it maintained a 166% bad loan cover as of March, up from 163% in December. It set aside P2.509 billion in loan loss provisions, down by 50% from P5.04 billion a year ago.

Meanwhile, Metrobank’s operating expenses inched up by 1.4% year on year to P14.7 billion, which caused its cost-to-income ratio to increase to 54.6% from 52.71% previously.

On the funding side, the bank’s total deposits stood at P1.74 trillion at end-March, slipping by 3.33% from the P1.8 trillion seen a year ago.

The decline was tempered by the 16% growth in its current account and savings account (CASA) deposits to P1.3 trillion. Metrobank said this allowed them to “reduce high-cost time deposits, which partly mitigated the drop in asset yields arising from the rate cuts in the past year.”

Metrobank’s capital adequacy ratio was at 19.9% as of March versus the 17.55% a year ago, while its common equity Tier 1 ratio also went up to 19.02% from 16.29%.

“This ensures that Metrobank will sustain its business resilience, and we remain confident that the bank is ready to take on opportunities as the economy recovers. We are in a strong position to withstand a resurgence in asset quality risks and we remain vigilant even as we all continue to battle the pandemic,” Metrobank President Fabian S. Dee was quoted as saying.

The bank recorded P2.37 trillion in assets as of end-March.

Shares in Metrobank went up by 2.27% or P1 to close at P45 apiece on Monday. — Beatrice M. Laforga