AMC to benefit banking industry, says Metrobank

Metrobank, the country’s biggest bank, has decided to make use of an asset management company (AMC) to cope with the rising level of its non-performing loans. (NPLs) due to the Asian financial crisis, it was disclosed yesterday by Metrobank executive vice president and chief financial officer Alfredo P. Javellana II.

He said the AMC will also benefit the banking industry.

"We all know that the Asian financial crisis severely affected the country’s business environment resulting in significant non-performing loans for the banking industry. As such, the idea of using an AMC to help the banks cope came up," Javellana said.

"As the biggest bank in the Philippines, we believe we should spearhead this idea," he added.

Moreover, Javellana said that the government originally considered the idea but was unable to pursue it due to budget constraints. Metrobank, thus, thought of taking the lead for the private sector.

Metrobank is currently working out the structure in cooperation with a foreign group. Javellana pointed out that once established, it would already be easy for the other banks to use the asset management company’s services.

"An AMC will definitely help our local banking industry cope with the lingering effects of the Asian financial crisis," Javellana stressed.

As of end-April, the country’s 45 commercial banks reported an average NPL ratio of 16.65 percent of total loan portfolio, marginally higher than the 16.6 percent reported in March.

Metrobank’s NPL is 15.56 percent, or around P29.01 billion, lower than the industry average.