METROPOLITAN BANK & Trust Co. saw its net income decline. — BW FILE PHOTO

METROPOLITAN BANK & Trust Co. (Metrobank) posted a lower net income in the first three months of 2020 as it set aside bigger loan provisions to prepare for the impact of the coronavirus disease 2019 (COVID-19).

In a filing with the local bourse on Thursday, the bank said its net profit in the first quarter settled at P6.1 billion, declining by 9.33% from the P6.75 billion seen a year ago.

“Recognizing the potential impact of the COVID-19 pandemic, the bank proactively doubled provisions to P5.0 billion, which tempered this quarter’s net income…,” it said in a statement.

“Our underlying business is strong. We started the year with healthy growth in loans, deposits and other revenue streams,” Metrobank President Fabian S. Dee said in the statement.

“However, current conditions point to an expected slowdown in the business environment and challenges ahead. Mindful of the potential impact of this pandemic, we decided to take the prudent approach of increasing provisions to cover anticipated risks. We have weathered periods of crisis in the past and we are confident that we are well prepared, as the bank has one of the strongest capital positions in the industry. We will continue to adjust our processes to ensure the sustained delivery of meaningful banking services; and implement the necessary measures to keep both our customers and our people safe,” Mr. Dee added.

Gross operating revenues from January to March climbed 13% to P27.6 billion while operating costs grew 8% to P14.5 billion. This caused its cost-to-income ratio to improve to 53% from 56% a year ago.

Growth in the bank’s core business came on the back of the 13% jump in gross revenue due to an eight percent rise in deposits and as its non-interest income reached P6.2 billion, driven by the 7% growth in service fees and commissions to P3.3 billion and net trading and foreign exchange gains of P1.4 billion.

The bank’s net loans and receivables went up six percent to P1.4 trillion during the period as it boosted support for customers’ business requirements across all segments such as corporates, middle market, SMEs (small and medium enterprises) and retail.

The quarter saw the bank’s nonperforming loan (NPL) ratio relatively stable at 1.4% while the NPL cover was at 114%.

“To anticipate the possible impact of the pandemic, the bank increased provisions to P5 billion, more than double the P2.4 billion in the first quarter last year,” Metrobank said.

Total deposits increased 8% to P1.7 billion during the period due to the 18% growth in current account, savings account (CASA) deposits. This improved CASA ratio to 66% from the 61% seen in the comparable year-ago period.

Meanwhile, Metrobank’s total asset base stood at P2.4 trillion while total equity was at P305 billion.

Capital adequacy ratio stood at 17.6% at end-March, while its common equity Tier 1 ratio was at 16.3%, both above the minimum regulatory levels.

The Ty-led lender’s shares ended trading at P39.05 apiece on Thursday, up by 3.86% or P1.45 from its previous close. — L.W.T. Noble