The First Metro Investment Corp. (FMIC), the investment banking subsidiary of the Metropolitan Bank and Trust Co. (Metrobank), has breached the billion peso mark in terms of net income for the second time in the past three years.
Last year, FMIC produced net earnings of P1.057 billion reportedly a unique experience for investment houses in the country. It was 47 percent better than the P718 million realized in the previous year.
In 2004, the investment house of the Metrobank group registered net earnings of P1.2 billion. However, officials clarified that it was due to “extraordinary gains.”
Total assets likewise expanded by 39 percent, or from P28.298 billion in 2005 to P39.331 billion last year.
“FMIC capitalizaed on historic low interest rates and rising stock prices to fast forward its financial performance in 2006,” Roberto Juanchito T. Dispo, FMIC senior vice president said.
Return in equity (ROE) grew to P8.3 billion last year, or almost 38 percent better than the P6.4 billion achieved in 2005. Stockholders’ equity grew by 28.5 percent.
Dispo explained that its treasury arm effectively traded with government securities boosting its assets while the investment banking group once more made its presence felt by arranging major loans for top corporates while issuing fixed income securities likde Tier 2 notes, corporate notes and preferred shares.
These included the landmark P3-billion, five-year loan of Ayala Corp., the P1.2-billion fixed-rate loan of Ayala Corp., the P1.05-billion corporate notes of Filinvest Development Corp., and the P600-million loan of Globe Telecommunications Inc.
The group also participated in the two major initial public offering (IPO) issues for the year, namely Manila Water Corp. and SM Investment Corp. (SMIC).
In 2005, FMIC raised total of P75.9 billion and it was involved in 11 out of the 14 debt transactions. It was involved in the Ayala retail bond, which raised P7 billion.
It also raised two fixed-rate financing facilities for Ayala — a P3-billion, five-year term loan, and a P4.2-billion, seven-year loan in that period. These transactions allowed Ayala to refinance its US dollar debt and reduce its foreign currency exposure.
Meanwhile, its investment advisory group took advantage of the strong surge of the country’s stock market in 2006 realizing sizable trading gains and bested all equity funds with its advised fund, First Metro Save and Learn Fund which earned 67 percent.
Its strong performance last year prompted a declaration of cash dividends amounting to a total of P847 million. Its significance can be gleamed in the fact that it was the fourth consecutive year of cash dividend payments.