MANILA, Nov. 12 (PNA) — First Metro Investment Corporation, the investment banking arm of the Metrobank Group, realized consolidated net income of Php 1.87 billion for the third quarter of 2014, Php 68 million or 4% above its nine months target.
Return on equity (ROE) is at 12.64% while return on assets (ROA) is at 2.72%.
The Financial Markets Group produced net revenue of Php 1.09 billion for the period. This is Php 2.54 billion lower than its Php 3.64 billion income in 2013, a year marked by exceptional trading gains.
First Metro president Roberto Juanchito Dispo said, “Despite a sluggish first half for the financial markets, the third quarter of the year has shown signs of renewed momentum. In the debt capital market, First Metro played major roles in three successful issuances. We were Joint Issue Manager and Joint Lead Underwriter in SM Prime’s Php 20 billion Fixed Rate Bonds, which were approximately 1.33x oversubscribed, allowing SM Prime to increase the issue size from the original Php 15 billion to Php 20 billion.
“We were also Issue Manager, Bookrunner and Joint Lead Underwriter in GT Capital’s Php 12 billion Fixed Rate Bonds, which were 2.2x oversubscribed and we sold approximately 40% of the total issue size, the highest among all JLUs.”
In the national government’s Php 140 billion Liability Management Transaction, First Metro was one of the Joint Deal Managers.
The Investment Banking Group generated total fee income of Php 319 million, Php 76 million or 20% lower than its Php 395 million income in the same period last year.
The group completed a total of 15 deals in the nine-month period, including the IPO of Century Pacific Food Inc.; Cebu Holdings Inc.’s Php 5 billion Fixed Rate Bonds; SM Investment Corporation’s Php 15 billion Fixed Rate Bonds; Cosco Capital Inc.’s Php 5 billion Fixed Rate Notes Facility; Pagbilao Energy Corporation’s Php 33.31 billion Project Finance; Ayala Land Inc.’s Php 8 billion Fixed Rate Bonds; and National Grid Corporation of the Philippines’ Php 21 billion Fixed Rate Notes Facility, among others.
The Investment Advisory and Trust Group raised Php 24 million in advisory and trust fees. This is 9% or Php 2 million higher compared to last year’s result of Php 22 million.
Other income represents share in earnings from major subsidiaries and affiliates and net gains from the sale of investments in Charter Ping An Insurance Corporation, Toyota Manila Bay Corporation and Toyota Cubao Inc. The sale of the equity investments is in line with the company’s capital raising strategy to address the Basel 3 requirements.
First Metro’s financial standing remains strong with consolidated assets up 10% from the year-end balance of Php 82.78 billion to Php 91.09 billion as of Sept. 30, 2014. Capital funds ended at Php 18.52 billion, Php 373 million or 2% lower than the Dec. 31, 2013 level of Php 18.89 billion.
This is the net effect of the earnings recognized for the period amounting to Php 1.87 billion offset by the decrease in the mark to market of AFS investments amounting to Php 689 million and declaration of dividends of Php 1.50 billion. Capital adequacy ratio under Basel III remains healthy at 16.23%.
Dispo added, “We see a very busy fourth quarter for First Metro as we close the remaining deals in our pipeline for the year. We anticipate a rally in the GS market as we foresee local inflation to ease significantly.
“The secondary GS market will likely be more liquid given that tax-exempt institutions are now allowed to trade in the broader secondary market. In the equities market, another round of outflows is in the offing as Fed lays down its groundwork for an interest rate hike.” (PNA)