METROPOLITAN Bank & Trust Co. (Metrobank) saw its attributable net profit increase by 28.87% year on year in 2023 amid increased interest income from loans due to higher rates and better asset quality.

The bank ended 2023 with an attributable net income of P42.238 billion, rising from P32.776 billion in 2022, its quarterly report filed with the stock exchange on Thursday showed.

This translated to a return on average equity of 12.51%, higher than 10.29% in 2022. Return on average assets also improved to 1.42% last year from 1.23% previously.

“Our solid performance in 2023 was strongly driven by our asset expansion, higher margins, improving efficiency levels and better asset quality. This indicates that we are firmly on track with our long-term growth strategies supported by our highly capable and resilient team of Metrobankers and strong balance sheet. We look forward to further expanding our partnerships with all our stakeholders,” Metrobank President Fabian S. Dee said in a statement.

Net interest income grew by 22.73% to P104.97 billion last year from P85.53 billion amid increased loan demand and as its net interest margin improved to 3.9% from 3.56%.

“Gross loans rose by 7.6% year on year, with consumer portfolio increasing by 15.9% on strong discretionary spending, outpacing the 5.5% rise in commercial loans,” Metrobank said.

Broken down, interest income grew by 50.06% to P153.612 billion amid higher interest earnings on loans and receivables, investment securities, interbank loans receivable, and deposit with banks and others.

Meanwhile, interest and finance charges increased by 188.83% to P48.642 billion.

On the other hand, other operating income went up by 6.39% to P28.504 billion last year from P26.79 billion.

“Fee income increased by 9% to P16.4 billion, largely driven by the expanding consumer business. Trading and forex gains were steady at P4 billion,” Metrobank said.

Operating expenses rose by 13.98% to P69.52 billion from P61 billion.

As a result, the bank’s cost-to-income ratio eased to 52.1% last year from 54.3% in 2022.

“The robust revenue growth offset the 14% increase in operating expenses, which was driven by transaction-related taxes, technology costs and higher manpower in line with capacity expansion,” the lender said.

Metrobank set aside loan loss provisions of P8.98 billion in 2023, up from P8.11 billion in 2022.

Even as its loans grew, its nonperforming loan (NPL) ratio eased to 1.7% in 2023 from 1.9% in 2022. NPL cover was at 180.3%.

On the funding side, deposits rose by 7.28% to P2.38 trillion from P2.22 trillion, with low-cost current and savings accounts deposits amounting to P1.44 trillion or more than 60% of the total.

Its loans-to-deposits ratio stood at 65.77% last year, up slightly from 65.59% in 2022.

Metrobank’s assets grew by 9.21% to P3.1 trillion at end-2023 from P2.84 trillion a year prior.

Total equity likewise rose by 11.78% to P366.74 billion from P328.09 billion.

The bank’s capital adequacy ratio stood at 18.28% last year, up from 17.68% previously, while its common equity Tier 1 ratio was at 17.44%, also higher than 16.83% the year prior.

Its liquidity ratio stood at 48.08%, rising from 47.64% previously.

“The bank’s strong profitability and substantial capital base prompted the Board of Directors to approve a total cash dividend of P5 per share for the year. The regular dividend was raised from P1.60 to P3 per share to be paid out on a semi-annual basis at P1.50 per share. In addition, a special cash dividend of P2 per share was also declared. The first payout of P3.50 will be given to shareholders on record as of March 8,” Metrobank said.

The bank’s shares climbed by P1.35 or 2.3% to end at P60.05 apiece on Thursday. — A.M.C. Sy