We know what you need. 2013 Annual Report a VISION To be the best bank for all our stakeholders. MISSION We aim to be a premier universal bank of international standing, committed to creating and providing the best possible value for our core constituents – clients, employees, shareholders, and the communities whom we serve. We shall exert all efforts to transform every opportunity to expand our sphere of business activities into instruments to help our constituents realize their own goals and aspirations. We shall strive to reach a highly diversified customer base through an extensive distribution network at the same time delivering a wide array of premium-value products and services with distinctive quality. We realize that our success depends on the quality of our people, the efficiency of our systems, and the strength of our organization. Hence, we shall continuously invest in our human resources to ensure a service force characterized by the highest standards of dignity, probity and professionalism. We shall constantly endeavor to be more responsive to dynamic market conditions, flexible in coping with customer needs, innovative in leading the competition, and united in pursuing common objectives. Our financial capability shall likewise be continually invigorated to maintain dynamism, growth and stability. Recognizing our responsibility to our shareholders, we shall exercise judicious management to consistently provide them with fair returns and enhance the value of their investments. As a responsible corporate citizen, we shall remain committed to making meaningful contributions for the economic and social development of the communities in which we serve. We deliver your needs At Metrobank, we are your partner. We are committed to know you better. Because that’s what a great partnership is all about, a partnership that you can trust. b Metropolitan Bank & Trust Company 2013 Annual Report 1 GROUP FINANCIAL HIGHLIGHTS In million pesos (except per share amounts) Increase (Decrease) Increase (Decrease) Increase (Decrease) 2013 2012 Amount % 2013 vs 2012 2012 vs 2011 As restated 2013 2012 2011 Amount % Amount % At Year End As restated As restated Total Assets 1,378,569 1,046,643 331,926 31.7% For the Year Trading and Investment Securities 367,295 247,412 119,883 48.5% Net Interest Income 38,269 30,854 29,437 7,415 24.0% 1,417 4.8% Loans and Receivables, net 611,064 525,895 85,169 16.2% Other Operating Income 40,655 26,224 19,696 14,431 55.0% 6,528 33.1% Total Operating Income 78,924 57,078 49,133 21,846 38.3% 7,945 16.2% Deposit Liabilities 1,016,268 738,694 277,574 37.6% Total Operating Expenses 49,497 37,853 34,523 11,644 30.8% 3,330 9.6% Equity Net Income 24,156 17,917 12,491 6,239 34.8% 5,426 43.4% Attributable to: Attributable to: Equity Holders of the Equity Holders of the Parent Company 134,887 117,733 17,154 14.6% Parent Company 22,488 15,399 11,031 7,089 46.0% 4,368 39.6% Non-controlling Interest 7,818 6,976 842 12.1% Non-controlling Interest 1,668 2,518 1,460 (850) (33.8%) 1,058 72.5% Book value per share 46.83 52.75 Basic/Diluted Earnings Per Share Attributable to Equity Holders of the Parent Company 8.02 5.44* 3.86* *Restated to include the effect of stock dividend issued in 2013 2 Metropolitan Bank & Trust Company 2013 Annual Report 3 Partnerships are essential in doing business. Over the past 50 years, Metrobank has built and nurtured strong partnerships with our stakeholders. From the Bank’s employees to our customers, government and civil society groups to businesses and foundations and committed individuals, our partners have been instrumental in Metrobank’s continuous success. The expertise and dedication of our people has allowed Metrobank to become the best bank for our stakeholders. The continued patronage and trust of our customers has catapulted us to rapid growth and industry leadership. Without the engagement and support of our social partners in the public and private sectors, we would have not been able to expand the reach and impact our development programs for nation-building. In the process of cultivating these partnerships, we have learned that indeed, great partnerships are made. They take time, effort and vision. As Metrobank embarks on our next half-century, you can be rest assured of our commitment to strengthen our existing partnerships as well as to forge new ones, promoting better collaboration and synergy to achieve the Bank’s long-term sustainability for the benefit of our stakeholders and the society. Dr. George S. K. Ty Founder, Metrobank Chairman, Metrobank Group 4 Metropolitan Bank & Trust Company 2013 Annual Report 5 CHAIRMAN’S MESSAGE “Our deep understanding Metrobank is ready of our customers lets to face the challenges that come with brighter us know exactly what prospects under an they need. This allows expanding economy. us to be one step ahead in anticipating and developing products. We have realigned our customer coverage model to ensure that we remain Dear Fellow Shareholders, sticky and relevant as our Bank delivered another international credit agencies: Standard & record performance in 2013. Poor’s, Fitch, and Moody’s. This was a strong our customers progress Our financial results reflected testament to the country’s solid economic through their own the strength of the Metrobank principles, sound financial system, and franchise and the gains achieved the generally positive investor sentiment. business and life cycle.” in our core business. Similarly, Metrobank’s financial YIn 2013, our asset base grew 32% and performance was complemented by peaked at P1.4 trillion. We also recorded the recognitions from external parties. The most highest-ever income in our 51-year history at recent was the credit rating upgrade by P22.5 billion. Moody’s Investor Services to Baa3, Arthur Ty Chairman This performance came on the back of which equates to Investment Grade status, a strong domestic economy. At 7.2% full year putting us at par with the Republic of the GDP, the Philippines was the fastest-growing Philippines. The other was being named player in Asia after China. Inflation was kept Strongest Bank in the Philippines by The Asian benign at 3.0%, while the low interest rate Banker, making us the only Philippine bank in environment fueled business activities across the Top 50 list in the Asia-Pacific region. the country and spurred system loan growth As we made great strides in our financial to 16%. and operating performance in 2013, sadly, Perhaps the highlight of the year was Typhoon Yolanda struck last November when the Philippines was awarded the much- and wreaked havoc in Eastern and Central coveted Investment Grade rating by all three Visayas. Although severely affected, our 6 Metropolitan Bank & Trust Company 2013 Annual Report 7 nine branches were relatively unscathed, and I would like to personally thank our growth and the issuance of Basel III-compliant In closing, the Board would like to thank more importantly, all of our 282 employees employees, especially those based in the Tier 2 Notes, we are confident we can maintain our management team and our employees for in the affected areas survived the ordeal. Visayas, for their spirit, faith, and steadfast a comfortable level of capitalization beyond their myriad efforts that have contributed to Nonetheless, the situation prompted a call commitment. They exemplify the core values the minimum ratios required under the new the Bank achieving its goals. to action. of a true Metrobanker. regulatory regime. Most importantly, we would like to In the aftermath of the typhoon, the 2014 will be another challenging year Rest assured, the new capital rules do express our gratitude to our shareholders, Metrobank Group organized extensive relief for the banking industry, but we face it with not diminish the importance we place on customers and partners for their continued and rehabilitation efforts, donating close to optimism. GDP growth is seen to remain building shareholder value and strengthening support, confidence and loyalty. P70 million in total financial aid. In keeping solid. We see the upside coming from higher customer relationships. We step into the future guided by the with our commitment to serve the community, government and investment spending, Operationally, we plan to diversify principles of trust, partnership, and corporate the Metrobank Foundation spearheaded sustained increases in remittances and our revenue streams and re-balance our social responsibility. We will stay committed rebuilding projects and medical missions. BPO receipts, and opportunities from portfolio such that risk asset growth will be to keeping you in good hands. Similarly, our employees, in cooperation increased economic activity, especially focused towards more favorable segments with GT-Metro Foundation, launched the from reconstruction and rehabilitation efforts. offering better risk-adjusted returns. We Metrobankers for Metrobankers Yolanda Fund In addition, the changing demographics will continue to use value-adding product drive to assist our colleagues in coping with are favorable, and new growth sectors offerings as our differentiation tool, to post–disaster activities. are emerging. seek opportunities in fee income within We take pride in the resilience and On the other hand, this year is marked our existing businesses, and to target new Arthur Ty dedication of our people. Metrobank was by many regulatory developments, foremost opportunities in consumer banking. Chairman the first to re-open in central Leyte, within of which is the adoption of Basel III. With A key element to our future growth two weeks after the devastating events of stringent standards on risk management and the expansion into the consumer space November 8. Further, we were among the and higher capital buffers, Basel III will is our focus on delivering the best customer first to commit to set up credit and support challenge banks to re-think the way they experience.