COVER SHEET 2 0 5 7 3 SEC Registration Number M E T R O P O L I T A N B A N K & T R U S T C O M P A N Y (Company’s Full Name) M e t r o b a n k P l a z a , S e n . G i l P u y a t A v e n u e , U r d a n e t a V i l l a g e , M a k a t i C i t y , M e t r o M a n i l a (Business Address: No. Street City/Town/Province) RENATO K. DE BORJA, JR. 8898-8805 (Contact Person) (Company Telephone Number) 1 2 3 1 1 7 - A 0 4 2 8 Month Day (Form Type) Month Day (Fiscal Year) (Annual Meeting) NONE (Secondary License Type, If Applicable) Corporation Finance Department Dept. Requiring this Doc. Amended Articles Number/Section Total Amount of Borrowings 2,999 as of 12-31-2020 Total No. of Stockholders Domestic Foreign To be accomplished by SEC Personnel concerned File Number LCU Document ID Cashier S T A M P S Remarks: Please use BLACK ink for scanning purposes. 2 SEC Number 20573 File Number______ METROPOLITAN BANK & TRUST COMPANY (Company’s Full Name) Metrobank Plaza, Sen. Gil Puyat Avenue, Urdaneta Village, Makati City, Metro Manila (Company’s Address) 8898-8805 (Telephone Number) December 31 (Fiscal year ending) FORM 17-A (ANNUAL REPORT) (Form Type) (Amendment Designation, if applicable) December 31, 2020 (Period Ended Date) None (Secondary License Type and File Number) 3 SECURITIES AND EXCHANGE COMMISSION SEC FORM 17-A ANNUAL REPORT PURSUANT TO SECTION 17 OF THE SECURITIES REGULATION CODE AND SECTION 141 OF CORPORATION CODE OF THE PHILIPPINES 1. For the fiscal year ended : December 31, 2020 2. SEC Identification Number : 20573 3. BIR Tax Identification No. : 000-477-863 4. Exact name of issuer as specified in its charter : METROPOLITAN BANK & TRUST COMPANY 5. Province, Country or other jurisdiction of incorporation or organization : Metro Manila, Philippines 6. Industry Classification Code : __________ (SEC Use Only) 7. Address of principal office : Metrobank Plaza, Sen. Gil Puyat Avenue, Urdaneta Village, Makati City, Metro Manila 8. Issuer’s telephone number, including area code : (632) 8898-8000; (632) 8898-8805 9. Former name, former address and former fiscal year, if changed since last report : Not applicable 10. Securities registered pursuant to Sections 8 and 12 of the SRC, or Sec. 4 and 8 of the RSA Title of Each Class : Common Stock Number of Shares of Common Stock Outstanding : 4,497,415,555 shares as of December 31, 2020 Amount of Debt Outstanding : P2.029 trillion for the Group; P1.769 trillion for the Parent Company (sum of deposit liabilities, bills payable, bonds payable and subordinated debts as of December 31, 2020) 11. Are any or all of these securities listed on a Stock Exchange? Yes [ x ] No [ ] All of the securities of the issuer are listed in the Philippine Stock Exchange. 12. Check whether the issuer: a. has filed all reports required to be filed by Section 17 of the SRC and SRC Rule 17 or Section 11 of the RSA and RSA Rule 11(a)-1 thereunder, and Sections 26 and 141 of the Corporation Code of the Philippines during the preceding 12 months (or for such shorter period that the registrant was required to file such reports.) Yes [ x ] No [ ] b. has been subject to such filing requirements for the past 90 days. Yes [ x ] No [ ] 13. Aggregate market value of the voting stock held by non-affiliates based on closing price as of December 31, 2020: P106.24 billion 4 PART I – BUSINESS AND GENERAL INFORMATION ITEM 1 – BUSINESS DESCRIPTION OF BUSINESS 1. Business Development Metropolitan Bank & Trust Company (“Metrobank” or “the Bank”) was incorporated on April 6, 1962 by a group of Filipino businessmen to provide financial services to the Filipino-Chinese community. Since its formation, the Bank has diversified its business, and to date provides a broad range of banking and collateral services to all sectors of the Philippine economy. The original Certification of Incorporation of the Bank was issued by the Securities and Exchange Commission (SEC) for a 50-year corporate term. The SEC approved the renewal on November 19, 2007. The Bank opened its first office in Binondo, Manila on September 5, 1962. Within a year, the Bank opened its second branch in Divisoria, Manila. Soon after, the Bank started expanding outside Manila with the opening of its first provincial branch in Davao. In 1975, the Bank rolled out its first international branch in Taipei, followed by offices in New York, Guam, Hong Kong, and Tokyo towards the early 1980s. Initially, the role of the Bank’s foreign offices was to tap expanding Overseas Filipino Workers (OFW) remittance business and to complement its corresponding branch network. This strategy proved successful as the OFW market grew strongly and the political turbulence in the Philippines made access to foreign exchange difficult. It was during this period that the Bank started its Foreign Currency Deposit Unit (FCDU) operations. The Philippine Central Bank authorized Metrobank to operate its FCDU on April 15, 1977. In November 1980, the SEC approved and certified the listing of 500,000 common shares of Metrobank’s capital stock. On February 26, 1981, Metrobank’s common shares were listed on the Makati Stock Exchange Inc. and the Manila Stock Exchange (which has since unified to become The Philippine Stock Exchange, Inc. or PSE), with the trading symbol of MBT. On August 21, 1981, Metrobank became one of the first to be granted a universal banking license by the Philippine Central Bank, now Bangko Sentral ng Pilipinas (BSP). This license allowed the Bank to engage in “non-allied undertakings” which include automobile manufacturing, travel services and real estate, as well as finance-related businesses such as insurance, savings and retail banking, credit card services and leasing. On August 13, 2013, the SEC approved the amendment of the Articles of Incorporation of the Bank increasing its authorized capital stock from P50 billion to P100 billion composed of 4.0 billion common shares and 1.0 billion non-voting preferred shares, each with a par value of P20 per share. The Bank declared a 30% stock dividend equivalent to 633.4 million common shares (approved for listing by PSE on September 10, 2013) which was applied as payment for the required minimum 25% subscription to the increase in authorized capital stock. Total outstanding shares increased to 2,744,801,066 after the stock dividend. On February 24, 2015, the SEC confirmed the exemption of a rights offer for up to P32.0 billion worth of common shares from the registration requirements under Section 8 of the Securities Regulation Code. Subsequently, in April 2015, the Bank completed a rights offer for 435,371,720 common shares with par value of P20.00. Total outstanding shares increased to 3,180,172,786 after the transaction. On April 12, 2018, the Bank completed another stock rights offer for 799,842,250 common shares with par value of P20.00. Total outstanding shares increased to 3,980,015,036 after the transaction. On October 4, 2019, the SEC approved the amendment of the Articles of Incorporation of the Bank increasing its authorized capital stock from P100 billion to P140 billion composed of 6.0 billion common shares and 1.0 billion non-voting preferred shares, each with a par value of P20 per share. The Bank declared a 13% stock dividend equivalent to 517.4 million common shares (approved for listing by PSE on November 19, 2019) which was applied as payment for the required minimum 25% subscription to the increase in authorized capital stock. Total outstanding shares increased to 4,497,415,555 after the stock dividend. 5 2. Business of Registrant Services/Customers/Clients Metrobank offers a complete range of commercial and investment banking services. The Bank’s customer base covers a cross section of the top Philippine corporate market. The Bank has always been particularly strong in the middle market corporate sector, a significant proportion of which consists of Filipino-Chinese business. The Bank’s principal business activities involve deposit-taking and lending, trade finance, remittances, treasury, investment banking and thrift banking. The Bank is also a major participant in the Philippine foreign exchange market. It is accredited as a Government Securities Eligible Dealer (GSED) and has played an active role in the development of the domestic capital markets. The Bank provides investment banking services through First Metro Investment Corporation (FMIC) and retail banking through the Bank and its subsidiaries Philippine Savings Bank (PSBank) and Metrobank Card Corporation (MCC) (before the merger). On March 13, 2019, the respective BODs of the Bank and MCC approved the proposal to merge MCC into the Bank which will unlock the value of MCC and help realize the following objectives: (1) improve synergy and cross-sell; (2) increase the profitability and improve capital efficiency; and (3) enable the Bank to be more competitive in the credit card business. The proposed merger was ratified by the stockholders of the Bank on April 24, 2019, approved by the BSP on October 23, 2019, and approved by the SEC on January 3, 2020. Contribution to Sales/Revenues The net interest income derived from lending, investment and borrowing activities represents 70.64%, 72.01% and 74.32% of the Group’s revenue net of interest and finance charges in 2020, 2019 and 2018, respectively. Other operating income (consisting of service charges, fees and commissions; net trading and securities gains; net foreign exchange gain; gain on sale of investments in an associates; leasing income; profit from assets sold; income from trust operations; dividend income; and miscellaneous income) and share in net income of associates and a joint venture account for 29.36%, 27.99% and 25.68% of the Group’s revenue net of interest and finance charges in 2020, 2019 and 2018, respectively.