METROPOLITAN Bank & Trust Co. (Metrobank) saw its net income increase by 60% last year as it set aside lower loan loss reserves.

The bank’s net profit reached P22.364 billion in 2021 from P13.974 billion in 2020, based on its audited financial statement filed with the local bourse.

Return on equity increased to 6.89% as of end-2021 from 4.36% a year earlier. Meanwhile, return on average assets rose to 0.89% from 0.56%.

However, the lender’s net earnings have not yet returned to the pre-pandemic level of P28.874 billion in 2019.

“Our positive performance in 2021 validates our strategies of fortifying our balance sheet and proactive provisioning during the pandemic,” Metrobank President Fabian S. Dee said in a statement.

Metrobank’s net interest income dropped by 12.8% to P75.049 billion in 2021 from P86.107 billion a year earlier, mainly due to lower income from loans and receivables amid the decline in volume and the interest rate cap on credit card.

Interest earnings from loans and receivables went down by 23.5% year on year to P65.525 billion from P85.69 billion. The bank’s net interest margin has stabilized at 3.4% since the second quarter of 2021.

“The sequential quarterly recovery in corporate and credit card loans has likewise been sustained, reflecting improving business and consumer confidence,” Metrobank said.

It added that the 12% increase in its low-cost current and savings accounts to P1.5 trillion helped bring down overall funding costs.

Metrobank’s loan loss provisions reached P11.834 billion, down by 71% from the P40.76 billion in 2020, which was during the height of the pandemic lockdowns.

Gross nonperforming loans (NPLs) dropped by 11.5% to P27.354 billion from P30.919 billion.

This brought the bank’s NPL ratio to 2.2%, down from 2.4% in the prior year. NPL cover also improved to 174.7% from 163%.

Meanwhile, the lender’s non-interest income went down by 26.4% year on year to P25.831 billion from P35.129 billion amid lower trading and foreign exchange gains which offset the increase in free income.

Broken down, income from fees, services and commissions rose by 14.6% to P13.418 billion. However, trading gains went down by 48.9% to P3.354 billion, while foreign exchange gains dropped by 55.9% to P1.904 billion.

Other operating costs declined by 1% to P59.473 billion from P60.12 billion mainly amid lower occupancy and tax costs.

As of end-2021 Metrobank’s consolidated assets and equity stood at P2.5 trillion and P318.5 billion, respectively.

Its capital adequacy ratio was estimated to have ended 2021 at 19.3%, while common equity Tier 1 ratio was seen at 18.4%, based on its end-December balance sheet. Both are above the minimum regulatory requirements.

The Ty-led lender raised P19 billion through its offering of 5.25-year bonds in May last year.

Metrobank’s shares finished at P59.50 each on Thursday, down by 35 centavos or by 0.58% from its previous close. — L.W.T. Noble