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Maybank Philippines, Inc., the local unit of the Maybank Group, booked a record net income of Php1.01 billion in 2014 from Php 409 million in the year before amid intense competition and challenging market conditions.
The Bank's financial performance marked a new milestone in 2014 as earnings rose to a new height. It grew more than two-fold to breach the Php1-billion mark, a first since MPI started operations in 1997. The Bank's growth was boosted by market-beating growth in its core businesses and the realization of one-off gains from its strong and consistent performance in the past three years.
MPI's net income translated to a return-on-average equity of 9.5% from 4.2% a year ago.
"2014 turned out to be an eventful year for MPI as new milestones and breakthroughs were achieved against a business environment that remained challenging not only for MPI, but the whole banking industry as well," MPI President and CEO Herminio M. Famatigan, Jr. said.
He added: "We beat the industry's performance by posting faster growth rates, which was reflected by the expansion of our core businesses."
Aside from above-industry net interest margin, which improved to 5.01% by managing down the cost of funds, the strong growth in net interest income was also fuelled by the continued growth of MPI's loan book. Loans rose 32% year-on-year to Php49 billion from Php38 billion. In particular, consumer loans climbed 44% and commercial loans by 24%.
"Both our retail and corporate lending businesses performed well last year. On top of this, our Treasury team also boosted our profit with the positions they took allowing us to realize significant interest income from investments and placements," the Bank chief said.
The Bank was not spared from depressed trading gains last year, dragging its non-interest income. The strong growth in net interest income, however, allowed MPI to post a healthy growth in operating income, which rose by 26% to Php1 billion.
MPI was able to bring down total interest expense by 20% even with the 4% growth in total deposits.
The Bank has improved its cost management last year under the Maybank Group's Strategic Cost Management Program as demonstrated by the Bank's operating expenses, which amounted to Php3.43 billion—about Php101.83 million below the Bank's projected expenses for 2014.
By end 2014, MPI remained well-capitalized with a capital adequacy ratio of 16.7%, above the Bangko Sentral ng Pilipinas' 10% minimum requirement, while its Tier 1 capital stood at 15.6%.
Moving forward, MPI is poised for further growth in the Philippine market as it sees the sizeable infrastructure investments and aggressive expansion of branch network done in the previous years start to pay significant dividends.
"We remain committed to our long-term aspiration of being one of the top 10 most profitable banks in the Philippines and the top 5 players in key consumer and enterprise financing segments," Mr. Famatigan said.