Metrobank to add more branches in China

BusinessWorld

Posted at Jan 26 2011 07:05 AM | Updated as of Jan 26 2011 10:12 PM

MANILA, Philippines - The Metropolitan Bank & Trust Co. (Metrobank), the country’s second largest in terms of assets, wants to expand its presence in China to take advantage of opportunities in the world’s second largest economy.
 
“In five years, we plan to have 20 branches in China,” Ferdinand Antonio A. Tansingco, Metrobank head of treasury group, told reporters after Metrobank listed additional shares at the Philippine Stock Exchange yesterday.

Metrobank listed an additional 200 million new common shares after raising P10 billion two weeks ago to strengthen its capital position in preparation of the stricter regulatory requirements under Basel 3.

Metrobank is present in China through subsidiary Metropolitan Bank (China) Limited (MBCL), which is based in Nanjing, the capital of Jiangsu province.

A branch and a sub-branch in Shanghai and a representative office in Beijing were folded into MBCL in April last year.

Mr. Tansingco clarified the 20 branches would include MBCL’s headquarters in Nanjing and the offices in Shanghai and Beijing.

“China is [one] of the fastest big growing economies,” Mr. Tansingco pointed out.

“We have to align ourselves and maximize our potential in China,” added Francisco C. Sebastian, Metrobank vice chairman and concurrent president of the First Metro Investment Corp., the Metrobank Group’s investment banking arm.

Metrobank wants to open branches in Xiamen and Guangzhou, and more branches in Beijing, the Chinese capital, among other locations.

“We just have to wait for the Chinese regulators to approve [our branch] applications,” Mr. Tansingco said.

Metrobank is the only Philippine bank in China that has a wholly-owned foreign enterprise license. “With this license, we can set up branches anywhere as long as the Chinese regulators [grant] their approval,” Mr. Sebastian said.

The bank’s expansion plans, Mr. Tansingco said, has been “capitalized” already.

For the bank’s expansion plans in the Philippines, Metrobank Vice President and Head for Investor Relations Jette C. Gamboa said the bank plans to open 30 new branches outside Metro Manila this year.

“We are optimistic in the countryside... countryside lending has brought us good [earnings],” Mr. Tansingco remarked.

Metrobank’s additional listing beefed up the bank’s capital adequacy ratio (CAR) -- a measure of financial strength -- to 17.8% from 16%, exceeding the Bangko Sentral ng Pilipinas’ (BSP) 10% minimum requirement. It also lifted the bank’s Tier 1 ratio to 13%.

“We pre-empted the regulations that will be imposed by the BSP for Basel 3,” Mr. Tansingco said.

The Basel 3 standards require higher common equity capital among banks, although the BSP has repeatedly pointed out the country’s banks currently exceed the level contemplated by global regulators.

Asked about future capital-raising activities, Ms. Gamboa said Metrobank’s 17.8% CAR gives it “enough leg room” so likely it would not conduct any fund-raising activities in the immediate future.

“I cannot give an immediate answer, but with what we know right now, the [17.8%] CAR is enough,” she said.

The P10 billion raised from the stock rights offer that began January 5 and ended January 14 also boosted the bank’s ability to lend to a single entity.

“Our SBL (single borrower’s limit) is now more. We can now lend P2.5 billion to P3 billion per group,” Mr. Tansingco said.

The SBL limits the amount a bank can lend to a single borrower to 25% of that bank’s net worth.

Metrobank, Ms. Gamboa said, is aiming to grow its loan portfolio by 11 to 12% this year. Its net loans and receivables as of the first three quarters rose by 13% to P377 billion on the back of corporate and consumer lending.