Economy · August 6, 2022

Faster loan expansion boosts Metrobank’s first-half profit

METROPOLITAN Bank & Trust Co. (Metrobank) posted 33% growth in its net profit on Tuesday in the first half of the year as the bank saw performance improvement across the board.

The bank’s net profit grew to £ 15.6 billion in the first six months of 2022, while profits increased 95% to £ 7.6 billion in the second quarter.

Metrobank said it has seen improvements in various areas such as faster loan expansion, improved interest margin, robust growth in fee income, stable operating costs, and lower provisions in healthier asset quality.

“The continuous improvement of the bank’s performance consolidates our strategy as we enable various clients and companies as economic assets,” said Metrobank president Fabian S. Dee. “Our focus on meeting the needs of our clients, actively managing risk and promoting efficiency, has driven our solid operating results and will continue to do so in the medium term as the economy expands.”

The bank’s gross lending increased 9% year-on-year to £ 1.3 trillion, driven by a 12% growth in corporate and commercial lending and a 16% increase in gross credit card claims.

Asset quality also improved for Metrobank with a 7% decline in non-performing loans (NPLs). The ratio of non-performing loans to total loans stood at 1.9 percent in the first half, down from 2.3 percent a year ago and significantly lower than the industry’s non-performing loan ratio of 3.9 percent in May.

Due to the reduction in non-performing loans, the bank further reduced provisions by 46% in the first half. Metrobank’s non-performing loan coverage stood at 196% during the period.

Meanwhile, total deposits grew 13% to £ 2.1 trillion. Current account / savings account (CASA) deposits increased 10 percent to £ 1.5 trillion from a year ago, which resulted in lower funding costs.

Non-interest income also increased 8% in the first half, driven by an 18% increase in fees and other non-interest income. Despite the volatility of the markets, the bank managed to record a £ 3.4 billion profit from trading income from strong client-driven flows.

The bank remained unchanged at £ 29.4 billion, supported by ongoing efforts to improve operational efficiency, resulting in a 53.8% cost-to-income ratio, an improvement from 57.2% in the same period of last year.