Metrobank’s income before provisions grow 41% in Jan.-Sept.

Metropolitan Bank & Trust Company on Friday announced that its income before provisions grew by 41% to P52.4 billion in the first nine months of 2020, which enabled the Bank to set aside additional provisions for bad loans in view of the COVID-19 pandemic.

In a disclosure to the Philippine Stock Exchange, Metrobank said its net income stood at P11 billion.

“Our results are relatively strong across the board. Total revenues grew 20% to P96.3 billion, income before provisions increased by 41% to P52.4 billion, and net interest margin improved further to 4.1%, while deposits and capital levels remain very healthy,” said Metrobank President Fabian Dee.

“Amidst the effects of the pandemic looming over the economy, the Bank’s overall performance is better than expected,” Dee said.

The Metrobank chief said that even though non-performing assets are currently within manageable levels, our strategy is to be conservative by building reserves in case the crisis drags on.

While non-performing loans (NPL) have been relatively manageable so far, Metrobank has set aside P35.4 billion in provisions for bad loans, almost five times more than the P7.8 billion provisions booked in the same period last year.

As a result, the NPL cover went up to 174% from 96% previously, which is supportive of the bank’s conservative provisioning strategy.

As of end-September 2020, the NPL ratio rose to 2.25% from 1.52% in the same period last year.

The increase in NPLs remains within expectations amidst a slowdown in the economy, according to Metrobank.

Deposits, meanwhile, grew by 10% to P1.7 trillion, propelled by the 22% growth in low-cost deposits.

As the global health crisis continues to constrain economic activities, net loans and receivables contracted by 13% year-on-year to P1.2 trillion, Metrobank said.

Commercial lending sustained a slowdown as clients deferred expansion plans and used excess liquidity to pay down debt obligations. Consumer loans similarly declined amid economic uncertainty, which limited consumption to essential goods and deterred big-ticket spending, the bank said.

Non-interest income rose 28%, lifted by robust trading and foreign exchange gains of P17.8 billion.

Meanwhile service fees and commissions remained weak, declining by 10% primarily due to lower transaction volumes and waiver of some fees.—AOL, GMA News