METROPOLITAN BANK & Trust Co. (Metrobank) saw its net income rise by 11.44% in the second quarter as it booked higher net interest earnings amid an expanded loan book and elevated rates.

The Ty-led bank’s attributable net income stood at P11.61 billion in the April-to-June period, up from P10.42 billion in the same period last year, according to its financial statement disclosed to the stock exchange on Thursday.

This brought its net profit for the first semester to a record P23.61 billion, rising by 12.95% year on year from P20.898 billion.

Metrobank’s first-half performance was driven by “robust asset expansion, stable margins, well-managed cost growth and healthy asset quality,” it said.

This translated to a return on average equity of 13.27%, up from 12.89% a year prior. Return on average assets also inched up to 1.48% from 1.46%.

“Our strong capital position and robust asset profile continued to support our expanding core businesses despite market challenges. Prospects of easing inflation driven by government efforts could further spur consumer demand,” Metrobank President Fabian S. Dee said.

“We are firmly on track to meet our medium-term growth aspirations as we support various public and private sector initiatives that continue to drive economic growth,” he added.

Metrobank’s net interest income grew by 13.87% to P29.27 billion in the second quarter from P25.71 billion in the same period last year.

The increase was driven by a 17.7% growth in interest earnings amid higher income on loans and receivables and on investment securities, which partly offset a 25.99% increase in interest and finance charges.

The bank’s net interest margin stood at 3.99% at end-June, slightly higher than 3.93% a year prior.

Meanwhile, other operating income fell by 20.01% to P5.45 billion in the second quarter from P6.81 billion a year ago amid lower net trading, securities and foreign exchange gains and despite a slight increase in fee and miscellaneous income.

Metrobank’s operating expenses climbed by 9.61% year on year to P18.39 billion amid higher manpower and transaction-related costs, among others.

Its cost-to-income ratio stood at 52.3% as of end-June.

The bank’s gross loans climbed 14.9% year on year at end-June on the back of a 15.2% increase in commercial loans and a 13.7% expansion in consumer loans.

“Net credit card receivables surged by 21.4%, while auto loans grew by 16.6%, sustaining the growth momentum in the consumer segment,” it said.

Even as it expanded its loan portfolio, Metrobank’s non-performing loan (NPL) ratio improved to 1.66% at end-June from 1.84% a year prior, while NPL cover was at 162.7% “to provide a substantial buffer against any emerging risks.”

Provisions for credit and impairment losses stood at P472 million in the second quarter, 77.68% less than the P2.12 billion set aside in the same period last year.

On the funding side, total deposits grew by 7.8% year on year to P2.4 trillion as of June, with low-cost current and savings account or CASA deposits making up 58% of the total.

This resulted in a loan-to-deposit ratio of 67.90%, up from 63.72% a year ago.

Metrobank’s consolidated assets expanded by 14.5% year on year to P3.3 trillion as of June.

Total equity stood at P355.09 billion.

Its capital adequacy ratio went down to 16.72% as of June from 17.9% a year prior. Its common equity Tier 1 ratio also dropped to 15.87% from 17.06%. Still, both remained well above the minimum levels required by the central bank.

Metrobank’s liquidity coverage ratio stood at a “substantial” 259.9%.

Its shares dropped by 70 centavos or 1.02% to close at P68 apiece on Thursday. — AMCS

CHINA Banking Corp. (Chinabank) saw its net income rise by 6% year on year to a record P11.4 billion in the first half on the strength of its core businesses, it said on Thursday.

“Our business performance continued to improve during the first half of the year,” Chinabank President & Chief Executive Officer Romeo D. Uyan, Jr. said in a stock exchange disclosure.

“The continued growth of our core lending and deposit-taking businesses, combined with stable asset credit quality and controlled operating costs, allowed us to register our highest first-half net income to date, solidifying our position as one of the top four banks in the country,” he added.

The bank’s financial statement was unavailable as of press time.

Chinabank’s first-half performance translated to a return on equity of 15.1% and a return on assets of 1.5%.

Its net interest income rose by 19% year on year to P30.4 billion at end-June amid elevated rates, with higher earnings from better loan volume helping offset the increase in interest expense.

Net interest margin was at 4.4%, improving by 25 basis points from the previous year.

Meanwhile, operating expenses increased by 5% to P14.1 billion due to higher volume-related taxes.

Its cost-to-income ratio stood at 49%.

Chinabank’s gross loans rose by 10% year on year to P817 billion as of June on strong demand across market segments, with consumer loans growing by 25% and making up a quarter of its loan book in the period.

Despite the increase in loans, its asset quality remained good as its nonperforming loan (NPL) ratio stood at just 1.9%. NPL coverage was at 141% even as it set aside lower credit provisions of P737 million.

On the funding side, deposits grew by 145% to P1.3 trillion.

Chinabank’s assets stood at P1.5 trillion at end-June, up by 12% year on year.

Total capital was at P152 billion, also rising by 10%. Its common equity Tier 1 ratio was at 14.5% and its total capital adequacy ratio stood at 15.3%.

“This solid financial performance, backed by strong capital and liquidity, reflects CBC’s inherent financial strength, prudent risk management, and sharpened customer focus,” Chinabank Chief Finance Officer Patrick D. Cheng said.

The listed lender has 648 branches and 1,078 automated teller machines (ATM) to date, including the 168 branches and 210 ATMs of Chinabank Savings, Inc.

Chinabank’s shares rose by 40 centavos or 1% to end at P40.40 apiece on Thursday. — A.M.C. Sy

BANK of the Philippine Islands (BPI) may issue another peso bond next quarter as it hopes to launch regular offerings amid strong market demand, its top official said.

“We want to do it. It’s something that we’re thinking about. There’s no firm plan because the issue we just did reached about P30-33 billion, so we’re kind of full. But the idea really is to eventually come to a point where we have a regular flow of bonds because the market needs it,” BPI Chief Executive Officer Jose Teodoro K. Limcaoco said at a briefing on Thursday.

Mr. Limcaoco was referring to the bank’s offering of 1.5-year peso-denominated Sustainable, Environmental, and Equitable Development or SEED Bonds, which ended on Thursday.

The bank wanted to raise at least P5 billion from the offer, which ended a day earlier than originally planned amid robust demand.

“When you take a look at the different businesses, a lot of our demand comes from the wealth side. A lot of demand comes from the branches. If it’s cost-efficient, why don’t we do it this way because it’s what the customers want anyway. We can split the cost with them. So, we can get a better yield at a lower cost,” he added.

For his part, BPI Treasurer and Global Markets head Dino R. Gasmen said it would be a challenge to issue bonds regularly as this would also depend on the bank’s current funding needs.

“We might not need funding by the next quarter, so that will stop us from issuing,” Mr. Gasmen said. “So, it’s a plan. It’s a challenge for us. The cost advantage is big, so if we can issue more, the better.”

It would also be difficult to issue sustainability bonds every quarter as “we don’t know if assets will come in as we expect,” he added.

“It’s hard to be short of sustainable assets because it’s just one-and-a-half years. Other bonds are five years. At least those have a longer time to fill up and fulfill the use of proceeds. We don’t want to be short of assets… so, we want to be careful there as well,” Mr. Gasmen said.

NARROWING MARGINS
Meanwhile, Mr. Limcaoco said the bank will continue to increase the share of non-institutional loans in its total loan portfolio to help offset the expected compression of its net interest margin amid the Bangko Sentral ng Pilipinas’ (BSP) upcoming monetary easing cycle.

“I think margins over time will compress. That’s a reality. As rates go down, margins will compress, and we have to make it up by volumes, to shifting your portfolio to loans which are less sensitive to policy rates… Things like auto loans, or mortgages are less sensitive. They react much later. That’s why for us, it’s about shifting more of our portfolio into consumer loans,” he said.

The bank hopes to eventually have 30% of its loan book come from non-institutional clients, Mr. Limcaoco added.

“Maybe two years ago, we were 76% or 77% corporate loans, and now we’re at 26% retail loans and 74% corporate loans. But the goal is to get it to 30%,” he said.

“We all know the economy looks very positive, so the top corporations will also be borrowing. We have to lend a lot more to the consumer side… It’s not an easy job,” he added.

Still, their margins may not narrow by much yet as the BSP is only expected to cut rates by 50 basis points (bps) this year, or two 25-bp deductions this quarter and next, Mr. Limcaoco noted.

BPI’s net income grew by 17.5% year on year to P15.3 billion in the second quarter, driven by higher revenues.

Its shares went up by P3.50 or 2.89% to end at P124.80 apiece on Thursday. — AMCS