Monday, 12 April 2010

First Metro’s 2009 net income surged 158%

Erik de la Cruz
Business Mirror

FIRST Metro Investment Corp. (FMIC), the investment-banking arm of Metropolitan Bank & Trust Co. (Metrobank), posted a 158-percent increase in net income to P1.03 billion for 2009 after taking lead roles in most of the year’s major corporate debt transactions.

The listed company looks on track to retain its title as the most aggressive local debt arranger in the country this year, having handled a number of deals in the first quarter, including the P18-billion syndicated loan facility for Beacon Electric Asset Holdings Inc. of the Manuel V. Pangilinan group.

“This magnitude of income growth is the outcome of concerted efforts by the various strategic business units and contributions of the net earnings of the affiliates,” FMIC said in a report to the Philippine Stock Exchange.

Its Investment Banking Group contributed P305.32 million, or 7.2 percent of the total revenue, higher by 64 percent compared with the P185.94 million booked in 2008. These were earnings from fees for handling major corporate debt transactions, including the P38.8-billion bond issue of San Miguel Brewery Inc.

FMIC played lead roles in more than 50 percent of all corporate debt transactions last year, including:

* Cebu Energy Development Corp.’s P16-billion “limited resource” facility;
* Philippine Long Distance Telephone Co.’s P10-billion and P500-million fixed-rate notes;
* Globe Telecom Inc.’s P5-billion fixed-rate bonds and P5-billion fixed-rate notes;
* Aboitiz Power Corp.’s P3-billion fixed-rate bonds and P6.5-billion fixed-rate notes;
* Filinvest Land Inc.’s P5-billion fixed-rate bonds;
* Manila Electric Co.’s P5-billion fixed- and floating-rate notes; and
* Metro Pacific Investment Corp.’s P4.5-billion bridge loan facility.

Its Investment Advisory Group added P284.29 million to the gross revenue, a reversal of the 2008’s P276.2-million losses. This reflected the improvement in the market value of the company’s stocks portfolio in the second to fourth quarters.

The Treasury Group, meanwhile, consistently contributed substantial streams of revenue, about 61 percent of last year’s total, or P2.58 billion. This was 37 percent higher than the P1.88-billion revenue of the previous year and came mainly from trading gains and interest income from investments in debt and equity securities.

FMIC’s corporate lending department booked gross revenue of P216.80 million, 57 percent lower compared with the previous year’s P503.30 million due to the decline in loan portfolio, from P5.29 billion in 2008 to P2.32 billion last year.

Interest and finance charges went up by P353.61 million, or 21 percent, mainly caused by the expanded treasury portfolio.

But total operating expenses climbed 49 percent to P720 million, essentially due to the increment in compensation and benefits resulting from additional hires and depreciation expenses arising from additional acquisitions, among others.

The company ended 2009 with total consolidated resources of P59.58 billion, 29 percent higher than the P46.16 billion at the close of 2008. The growth was driven mainly by the increase in investment securities and deposits in bank balances.

It said its liquidity remained high for statutory and legal reserves as well as for market opportunities, with capital funds at P8.58 billion at the end of 2009.

This translated to a capital-adequacy ratio of 24.32 percent, well over the minimum level of 10 percent that the central bank requires.

FMIC, which is 85-percent owned by Metrobank and the only listed investment bank among the 44 member-institutions of the Investment Houses Association of the Philippines, is one of the six issue managers for the April 20 to 27 foreign-currency bond sale to overseas Filipinos and institutional investors.

The government will offer $400 million and €75 million of three- and five-year bonds, which will be priced via an auction on April 20.

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