Philippines: Metrobank sees sustained loan growth in H2

MANILA, Philippines — Ty-led Metropolitan Bank & Trust Co. (Metrobank) is confident it can sustain credit growth despite the series of interest rate hikes by the Bangko Sentral ng Pilipinas (BSP).

Minda Claver Olonan, first vice president and head of investor relations at Metrobank, said in an interview with reporters during a tour of the bank’s 60th anniversary exhibit that there was a recovery in loan growth in the first half.

“We’re still seeing growth in demand from the corporate sector, particularly from the confidence in the retail and manufacturing sectors. Obviously they are building their inventories so there is demand for working capital,” Olonan said.

Olonan said the bank has yet to feel the impact of the decision of the BSP to raise interest rates by 175 basis points since May.

“Of course, it is something that we are closely monitoring. We’re monitoring in terms of potential impact on demand, as well as potential impact on the asset quality. But we haven’t seen significant impact,” Olonan said.

In the first half, Metrobank’s loan book increased by nine percent to P1.3 trillion, fueled by a 12-percent growth in corporate and commercial lending and 16-percent increase in gross credit card receivables.

Likewise, the allocation for credit and impairment losses plunged by 45.6 percent to P3.82 billion from P7.03 billion, resulting in a hefty 196-percent buffer to protect the bank against market risks.

Olonan believes the non-performing loan ratio has already peaked after improving to 1.9 percent in the first semester from a year-ago level of 2.3 percent.

“We are hopeful that the trends that we saw in the second quarter will continue to be sustained,” Olonan said.

Metrobank senior vice president and chief marketing officer Digs Dimagiba said the listed bank continues to launch promos to ease the burden of higher interest rates and entice consumers to borrow.

“Hopefully, consumers and customers will continue to be more active and more open. We’re not yet out of the woods from these things. Right now demand is actually there and the people are responding well to that,” Dimagiba said.

In the first half , the bank’s earnings jumped by 33.3 percent to P15.59 billion from P11.69 billion in the same period last year.

For the second quarter alone, Metrobank’s net income almost doubled after surging by 94.5 percent to P7.6 billion from P3.91 billion in the same quarter last year.

Metrobank’s assets stood at P2.7 trillion, while total equity amounted to P303.4 billion. Its balance sheet remains strong with capital adequacy ratio standing at 17.6 percent and common equity Tier 1 at 16.8 percent, both above the minimum requirement of the BSP.