Metrobank Earnings Hold Steady as Lending Offsets Trading Slump

Core Lending Delivers

Metropolitan Bank and Trust Co. posted a marginal gain in first-half earnings, reaching P24.9 billion compared with P24.85 billion a year earlier, as robust growth in its loan portfolio counterbalanced a sharp retreat in trading gains and elevated reserves for potential defaults.

The Manila-based lender, controlled by the Ty family, saw net interest income climb 12.8 percent to P67.74 billion during the six months ended June. Earnings from its securities holdings and corporate loan book drove the increase, while funding costs held nearly flat at P30.16 billion. The bank's net interest margin edged up one basis point to 3.74 percent.

Gross loans expanded 12.4 percent year on year, paced by a 12.8 percent rise in corporate and commercial exposures. Consumer credit advanced 11.1 percent, fueled by card receivables and residential mortgages. Total deposits climbed 10.4 percent to P2.6 trillion, with current and savings accounts comprising 60.5 percent of the base.

Trading Revenue Contracts

Non-interest income fell 21 percent to P13.9 billion, weighed down by a P4.08 billion decline in net gains from trading, securities and foreign exchange operations. Fee-based revenue offered a partial offset, rising P770 million as service charges and commissions grew nine percent to P9.35 billion.

President Fabian Dee acknowledged the headwinds. "The operating environment remained challenging in the first half, requiring us to stay disciplined and focused," Dee said in a statement. He emphasized the bank's commitment to balancing client support with prudent risk management in an uncertain climate.

Cost Base Expands

Operating expenses rose 10.1 percent to P42.44 billion, driven by higher wages, occupancy costs, technology spending and advertising outlays. The expense ratio deteriorated to 52.37 percent from 50 percent, reflecting the faster pace of cost growth relative to revenue.

Provisions for credit and impairment losses jumped 26.8 percent to P7.46 billion, reflecting a more cautious stance amid softer economic conditions. The bank's non-performing loan ratio ticked up to 1.81 percent from 1.54 percent, though it remained well below the industry average of 3.4 percent. NPL coverage stood at 133.3 percent.

Profitability Metrics Soften

Return on average equity slipped to 11.98 percent from 12.8 percent, while return on average assets declined to 1.28 percent from 1.42 percent. According to Metrobank, the compression stemmed from growth in the average equity and asset base outstripping the modest uptick in earnings.

Consolidated assets reached P3.92 trillion at the end of June. The loan-to-deposit ratio rose to 81.11 percent from 79.64 percent a year earlier, signaling more aggressive deployment of the deposit franchise.

Outlook Remains Cautious

Metrobank's second-quarter performance mirrored the broader trend, with net income slipping 2.3 percent to P12.3 billion from P12.59 billion. The quarterly result underscored the tension between resilient lending volumes and weaker capital-markets activity, a pattern that has defined the Philippine banking sector's 2026 so far.

The lender's ability to defend its interest margin while expanding market share in corporate and retail credit suggests its core franchise remains intact. Yet the uptick in provisions and the widening gap between revenue and expense growth point to mounting pressure on profitability if credit quality deteriorates further or trading conditions fail to recover in the second half.