Metrobank Q1 profit up on margin gains amid market volatility

Insider Spotlight

• Net income hits P12.6 billion on stronger core lending
• Net interest margin improves to 3.7 percent
• Loans and deposits post steady expansion
• Asset quality remains better than industry
  
  
  

Metropolitan Bank & Trust Co. (Metrobank) booked a net income of P12.6 billion in the first quarter, supported by higher margins, steady loan growth, and resilient fee income, underscoring the strength of its core banking franchise.

The results highlight how large Philippine banks are benefiting from still-elevated interest rates and stable credit demand, even as market volatility weighs on trading income.

Fabian S. Dee

President, Metrobank

By the numbers

Net interest income rose 13.6 percent to P33.4 billion, driven by a 12-basis-point improvement in net interest margin to 3.7 percent, Metrobank said in a statement. 

Gross loans expanded 9.2 percent year-on-year, with corporate lending up 8.6 percent and consumer loans climbing 11.2 percent, signaling broad-based credit demand.

Deposits grew to P2.6 trillion, with low-cost current and savings accounts rising 8.4 percent and making up 59.2 percent of the total. The loan-to-deposit ratio stood at 76.6 percent, indicating ample liquidity to fund further expansion.

Non-interest income provided support as fee and trust revenues increased 11.8 percent to P5.1 billion, helping offset weaker trading gains amid volatile markets.

The margins story

Operating expenses rose 9.8 percent to P21.1 billion, largely due to higher taxes and technology investments. 

This pushed the cost-to-income ratio to 52.5 percent, but margin gains helped preserve overall profitability.

Asset quality check

Metrobank maintained solid credit metrics, with its nonperforming loan ratio at 1.75 percent, well below the industry’s 3.44 percent. 

Loan loss coverage stood at 137.1 percent, providing a strong buffer against potential deterioration.

Balance sheet strength

Total assets grew 8.3 percent to P3.8 trillion, while equity increased 5.1 percent to P396.4 billion. Capital levels remained robust, with a capital adequacy ratio of 14.9 percent and common equity tier 1 ratio of 14Q1.2 percent, both above regulatory minimums. Liquidity coverage ratio was high at 151.1 percent.

What they’re saying

“Our first quarter results underscore the resilience of Metrobank’s core businesses and the consistency of our execution. With strong capitalization, solid asset quality and healthy buffers, we remain well-positioned to manage risks while continuing to support the growth and funding needs of our customers," Fabian S. Dee, president of Metrobank, said in the statement.

The bottom line

Metrobank’s first quarter performance points to steady earnings momentum, anchored on lending growth and margin expansion, even as cost pressures and market volatility linger. —Vanessa Hidalgo | Ed: Corrie S. Narisma