Metrobank unloads bad loans

REPORT FROM BUSINESSWORLD THE METROPOLITAN Bank and Trust Co. sold P4.63 billion worth of soured loans to a Japanese firm in December, the bank announced in a statement Wednesday. The nonperforming loans, composed of 100 accounts, were awarded to a unit of the Orix Corp. based in Japan. "We continue to look for opportunities to strengthen our balance sheet," said Cesar Lugtu, Metrobank senior vice-president in-charge of special accounts. Metrobank and Orix own a joint venture in the Philippines, Orix Metro Leasing and Finance Corp. The bank said that with the latest sale, a total of P4.69 billion in nonperforming loans were disposed of in 2007. Of this amount, P4.16 billion were foreclosed properties, more than triple the amount of foreclosed properties sold in 2006. The industry is expected to slowly unload more bad loans to improve the ratio of nonperforming loans to the total. Central bank figures show that as of the end of October 2007, the nonperforming loan ratio of universal and commercial banks stood at 5.29%, 1.81 percentage points lower than in 2006. Metrobank earlier reported a 19.7% year-on-year increase in consolidated net income to P5.31 billion from January to September 2007, compared to P4.44 million for the same period in 2006. Consolidated total assets stood at P673.84 billion at the end of the third quarter, an increase of 6.1% from P634 billion in the same period last year. The bank said net loans expanded by 6.3% to P282.85 billion from P266.01 billion during the period. Metrobank had said it granted loans to companies in power and oil, telecommunications, shipping, and manufacturing sectors. On the retail side, consumer loans continued to pour in, the bank said.