First Metro Investment income up 65% in Q1

MANILA, Philippines - First Metro Investment Corp. (FMIC) increased its net earnings  by 65 percent in the first three months of 2010 to P390 million from P235.8 million in the same period last year.

FMIC is the investment house unit of Metropolitan Trust & Banking Corp. (Metrobank), the country’s biggest lender.

“Robust capital markets in the first quarter underpinned the better than expected investment banking fees, higher trading income from its equity and fixed income portfolios, as well as distribution activities,” FMIC president Francisco Sebastian said.

However, he expressed caution for the second quarter as the spate of issues seem to have been saturated. “We expect the capital markets to be quieter in the second quarter as both issuers and investors take a wait and see attitude due to the upcoming elections.”

Meanwhile, fees from investment banking activities for the three months amounted to P210.9 million, or 152.5 percent higher than in the same period last year.

FMIC lead managed the following: Beacon Electric Assets Holdings Inc.’s P18-billion corporate notes; Panay Energy Development Corp.’s P14-billion project loan facility; the Home Development Mutual Fund’s (Pag-IBIG Fund) P12-billion bond issue; Petron Corp.’s P5- billion perpetual preferred shares; and Tanduay Distiller’s P5-billion retail bonds, among others.

FMIC participated in 75 percent of both government and private debt fund raising during the quarter. Per market segment, its share in government debt issuances was at 49  percent, and 90.2 percent for private debt.

“The investment banking arm of Metrobank is a force to reckon with when it comes to debt capital raising backed by a solid balance sheet, its own distribution desks, and Metrobank’s extensive branch network,” Sebastian said.

Recently, the investment house concluded the fund-raising for PSALM’s P30-billion retail bonds where the Metrobank Group raised approximately P14.1 billion or 47 percent of total issue. FMIC alone raised P7.6 billion of this amount.

Treasury operation’s revenues for the period were significantly higher by 13.8 percent to P677.8 million from P595.5 million. Trading income generated from a higher average volume of securities portfolio of P34.8 billion and the P25.2 million increased in shared fees from underwriting transactions fueled the increase in the revenues.

As the Philippine equities market rallied in the first quarter, driven by liquidity and a more positive macroeconomic view, FMIC’s income from stocks also leaped 130.7 percent from P32.2 million in first three months of 2009 to P74.4 million in the same period this year.