METROPOLITAN BANK & Trust Co. (Metrobank) is set to absorb its wholly owned credit card subsidiary in a bid to improve synergy and increase profitability.
In a regulatory filing on Thursday, the Ty-led bank said its board of directors approved yesterday to merge Metrobank Card Corp. (MCC) into its parent bank.
However, the absorption is still subject to approval of the Bangko Sentral ng Pilipinas, the Securities and Exchange Commission, as well as Metrobank’s shareholders at its annual meeting on April 24.
“The proposed transaction will unlock the value of MCC, being a wholly owned subsidiary of Metrobank,” the disclosure read.
In particular, the merger will improve synergy and cross-selling between the two firms, increase profitability and improve capital efficiency, and enable Metrobank to be more competitive in the credit card business, the lender said.
MCC is a finance company mainly offering credit and prepaid cards. The firm is also an insurance agency after it was granted by the Insurance Commission in June 2018 to sell life and non-life insurance products.
MCC became a wholly owned subsidiary of Metrobank in September 2018 after it bought the 40% stake of ANZ Funds Pty. Ltd. (ANZ) in the credit card company.
Metrobank conducted a stock right offer in March last year to fund the acquisition of the minority stake of ANZ among others. It raised P60 billion in the capital raising activity, selling 799.8 million common shares priced at P75 apiece.
MCC was a joint venture between the local bank and ANZ formed in 2003, with Metrobank holding the majority 60% stake.
As of 2017, MCC’s assets stood at P75.03 billion with 1.48 million cards in force.
The Ty-led lender booked a net income of P22 billion in 2018, up 21% from the P18.2 billion tallied the previous year, on the back of healthy expansion in loans.
Shares in Metrobank closed at P77.70 apiece on Thursday, down P1.20 or 1.52%. — K.A.N. Vidal