Metrobank to expand consumer lending

METROPOLITAN Bank & Trust Co. (Metrobank) is looking to increase the share of consumer loans in its total loan portfolio to help offset narrowing margins amid the Philippine central bank's ongoing easing cycle.

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Metrobank Head of Investor Relations Minda Claver A. Olonan said in an online briefing on Thursday that the listed lender is focused on growing its retail loan portfolio.

“Increasing the consumer [segment’s] share would help us improve the stability of the net interest margins (NIMs), as well as increase current fee income base,” Ms. Olonan said.

The bank targets to bring the share of consumer loans in its total loan book to 25%. This would help it reach its target return on equity (RoE) and return on assets of 15% and 2%, respectively, in the medium term, Ms. Olonan said. As of March, Metrobank’s return on equity was at 12.85%, while return on assets stood at 1.4%.

Increased consumer loans would also help drive an increase in the bank’s loan-to-deposit ratio to around 85% in the mediumto long-term from the current 82.5%, she added.

The bank does not expect a substantial increase in nonperforming loans even as it increases its exposure to the consumer space, Ms. Olonan said.