Metrobank starts sale of P8-B bad loans

Metropolitan Bank & Trust Co. (Metrobank), the country’s largest bank in terms of assets, will start auction today of up to P8 billion worth of non-performing loans (NPLs) in line with efforts to bring down its bad loans ratio to single-digit levels.

In a briefing following the listing of the company’s additional shares on the Philippine Stock Exchange (PSE) yesterday, Metrobank chairman Antonio Abacan Jr. said at least nine foreign companies have already signified interest to participate in the bidding.

Metrobank currently has P26 billion worth of NPLs or 9.8 percent of its total loan portfolio. It also has P32 billion worth of foreclosed assets, accounting for 7.5 percent of total assets.

Abacan said the bank also plans to enter into partnerships with real estate developers to dispose of foreclosed assets. Metrobank has programmed to dispose of about P4.5 billion worth of foreclosed assets this year.

Metrobank president Arthur Ty said the bank raised about P6.6 billion from the sale of 173.6 million new shares, mostly to foreign investors at P38 each share. Metrobank shares closed yesterday 8.54 percent or P3.50 higher at P44.50 at the PSE.

Ty said proceeds from the offering will be used to boost capital in preparation for more stringent capital requirements that will take effect next year.

No less than President Arroyo led the traditional ringing of the bell at the opening of trading session yesterday at the PSE’s headquarters in Makati to mark the listing of new common shares of Metrobank.

James Fleming, UBS equity capital markets head for Southeast Asia, said the Metrobank issue was the first primary overnight bookbuilding offer that took a total of only 18 hours with the majority of 164 million shares offered in the international market taken up in the first hour.

Ty said Metrobank has no plans at this point of acquiring another bank although it is still keeping its options open.

He said the group is not at all threatened by the impending merger between Equitable PCI Bank and Banco de Oro which would catapult the merged institution to the number two spot in the local banking sector.

"We would rather focus on what we can do and what we can control. If they are going to merge, there is nothing much we can do about it. To me, it’s a very big event in the industry. For us, we can keep an eye on them and just do our own thing. I’d rather have our focus on our clients and on our business rather than somebody else’s," Ty said.

He said Metrobank would continue expanding its presence abroad to take advantage of the growing remittances from overseas Filipino workers. It is looking at Middle East as new site for expansion.

Metrobank remains the Philippines’ biggest bank with consolidated assets of P588 billion, consolidated total loans and receivables of P278 billion, and consolidated deposits of P442 billion as of June 30, 2006.

It has a growing international presence in the United States, Asia and Europe with over 800 international and domestic branches, offices, subsidiaries and affiliates.