Metrobank reported a 26% improve in its internet earnings earlier than provisions, which amounted to P61.8 billion. Consistent with its technique to construct up reserves, the Financial institution booked provisions of P40.8 billion, leading to a full 12 months 2020 internet earnings of P13.8 billion. Metrobank’s substantial capital additionally prompted the Board of Administrators to declare a particular money dividend of P3.0 per share along with the common dividend of P1.0 per share.
“Our technique of early and aggressive provisioning in 2020 has made Metrobank stronger and well-prepared to climate future dangers. Regardless of the occasions of 2020, our core enterprise stays strong and we stay able to be a key associate in financial restoration. Our excessive capital buffer has given us the chance to distribute extra dividends this 12 months. We are going to proceed monitoring financial circumstances and contemplating methods that can keep a steadiness between sturdy capital and optimum returns,” mentioned Metrobank President Fabian S. Dee.
The Financial institution’s capital ratios are nonetheless among the many highest within the business. Based mostly on December 2020 steadiness sheet, Metrobank’s capital adequacy ratio (CAR) is estimated to maneuver from 20.2% to 19.1% and Widespread Fairness Tier 1 (CET1) ratio from 19.3% to 18.2% after dividends. Each measures are nonetheless considerably larger than the 11.0% minimal regulatory threshold for CET1 and 10.0% for CAR.
Non-performing loans have been manageable, with an NPL ratio of two.41% from 1.30% in 2019. Nonetheless, the Financial institution has put aside P40.8 billion in provisions for unhealthy loans, 4 occasions greater than the P10.1 billion provisions booked in 2019. In consequence, NPL cowl went as much as 163.0% from 103.0% in 2019 strengthening the financial institution’s capability to resist extra unhealthy loans.
The expansion in working earnings was supported by sturdy revenues and enhancing working effectivity. The 22% improve in low price present and financial savings accounts (CASA) to P1.3 trillion, propelled complete deposits to achieve P1.8 trillion in 2020, reflecting the Financial institution’s strong deposit franchise.
CASA ratio improved to 73% from 63% a 12 months in the past. Wholesome CASA deposit technology helped ease the general funding price in 2020 and supported internet curiosity margins, which improved by 14 foundation factors to three.98%. In consequence, internet curiosity earnings rose 11.8% from the earlier 12 months.
This was achieved amid a 13% contraction in gross loans to P1.3 trillion because the financial impression of the pandemic affected enterprise and shopper confidence. Industrial shoppers trimmed working capital loans and deferred enlargement plans whereas shopper prospects restricted spending to important items and deferred huge ticket purchases.
Non-interest earnings expanded by 20%, lifted by buying and selling and FX features of P19.2 billion because the Financial institution optimized its funding portfolio underneath a record-low rate of interest surroundings.
Progress in working bills was saved at 4% to P60.1 billion, underscored by continued efforts to boost productiveness and operational effectivity. Price-to-income ratio improved to 50% from 55% beforehand.
Metrobank ended 2020 because the nation’s second largest financial institution with consolidated property of P2.5 trillion.