PROFIT at Metropolitan Bank & Trust Co. (Metrobank) rose by 29.9% from a year earlier to P3.9 billion in the second quarter on higher fee-based income and reduced operational costs.
This brought its first-half net income to P11.687 billion, 28% higher than a year earlier, the lender said in a stock exchange filing on Tuesday.
The Ty-led bank’s net interest income fell by 20% to P18.46 billion last quarter, while net interest margin on average earning assets dropped to 3.37% as of end-June from 4.24% a year earlier.
This was partly offset by higher fee-based earnings, which increased by 42.7% to P3.07 billion due to higher transaction volumes and a 63% growth in miscellaneous earnings to P1.86 billion from. Gains from trading activities plunged by 90% to P1.15 billion.
“The recovery in recurring fees helped mitigate the impact of subdued loan demand and margin pressure,” Metrobank said.
Meanwhile, operating costs fell by 2.7% from a year earlier to P14.67 billion in the second quarter.
Metrobank’s bad loan ratio fell to 2.3% at the end of June from 2.4% in March, while the ratio of restructured loans to total loans was steady at 0.5%. Its bad loan cover grew to 179% from 166% in the first quarter.
The lender lowered its provisioning for loan losses by 69% from a year ago to P7 billion.
On the funding side, the bank’s low-cost current and savings accounts rose by 13.5% to P1.3 trillion as of June, accounting for 73.8% of its total deposits. This should help keep its funding costs steady, it said.
Its capital adequacy ratio rose to 20.36% in June from 19.98% a year earlier, while its common equity Tier 1 ratio grew to 19.49% from 18.66%.
The bank booked a 7.32% return on equity ratio, higher than 5.78% a year ago.
“With the sustained progress in vaccination rollouts across the country, we are optimistic of the recovery of the economy,” Metrobank President Fabian S. Dee said in the statement. “We remain driven to keep our growth momentum.”
He said reserves were 179% of bad loans and capital ratios were almost double the regulatory minimum. “With abundant liquidity, the bank is in a strong position to endure prolonged risks. We have the capacity and are looking forward to provide funding support to business activities that will help push economic recovery.”
Metrobank shares rose by P1.10 to P45.20 apiece on Tuesday. — Beatrice M. Laforga