FMIC sets 20% earnings expansion this year

MANILA, Philippines - First Metro Investment Corp. (FMIC) has set a 15- to 20-percent growth target in its net earnings this year. 

In 2011, the investment subsidiary of the Metrobank Group reported a P2.2-billion income, up 28.8 percent from the P1.7 billion in 2010. Return on equity (ROE) stood at 20.56 percent. 

FMIC president Roberto Juanchito T. Dispo said that revenue stream would come from trading income. 

“It will come primarily from trading income on government securities and equities. Fee income from investments banking will remain strong because of the active capital market transactions from initial public offerings (IPOs), project finance, advisory services, and mergers and acquisitions (M&A),” Dispo said. 

Last year, FMIC participated in 83.4 percent of the total peso-denominated domestic capital market issuances amounting to P771.2 billion. This includes the P687.5 billion volume of fund raising activities for the Republic of the Philippines (ROP). 

The investment house bases its optimism likewise with its positive outlook towards the economy this year. 

The economies and equity markets of East Asian countries, including Malaysia, Indonesia and Philippines, performed well last year. Malaysia’s economy grew 5.1 percent, while Indonesia and the Philippines grew 6.5 percent and 3.7 percent, respectively.  

In the equity markets, Indonesia’s 3.2 percent and the Philippines’ 4.1 percent growths, are the highest in the world. 

The FMIC chief executive said the Philippines experienced “a perfect storm” that served as conducive factors of abundant liquidity, driven by record-setting overseas Filipinos remittances and a world-leading business process outsourcing (BPO) industry, receding inflation and low interest regime, stable exchange rate and appropriate and strategic monetary and fiscal policies. 

“We see this year auguring well for the country because its economy is buoyant, supported by strong fiscal and monetary management, healthy macroeconomic factors, strong external payments position and a sound banking system,” Dispo added. 

In 2011, the Treasury Group realized earnings worth P1.2 billion, 34 percent higher than last year.  

Net interest income from the treasury portfolio driven by higher level of securities portfolio reached P434 million. Gains from government securities trading amounted to P615 million while fee-based income from securities distribution is P116 million. 

The Investment Banking Group made a total income from fees of P275 million or P4 million better than previous year’s fees.  

Dispo said that the bulk of this revenue was generated through various significant deals, including the Beacon Electric Assets Holdings Inc.’s P11-billion corporate notes, Puregold Price Club Inc.’s P8.6-billion initial public offering (IPO), Manila Water Co. Inc.’s P10-billion corporate notes, Metropolitan Bank & Trust Co.’s P10-billion stock rights offering, among others.