Metrobank lends P11 billion to Ayala Group

MANILA, Philippines — Ty-led Metropolitan Bank & Trust Co. (Metrobank) has extended P11 billion worth of loans to diversified conglomerate Ayala Corp. as it ramps up its capital expenditures this year.

Mylene Caparas, executive vice president and head of institutional banking at Metrobank, said the country’s second largest bank in terms of assets has consistently partnered with various members of the Ayala Group since 2012 to fund its capital expenditure and equity financing requirements.

“We are privileged to be an Ayala Group partner in its efforts to change the developmental landscape of the Philippines. Apart from supporting them through our out-of-the-box initiatives, we are likewise determined to promote sustainable business practices and broaden economic inclusivity,” she said.

Caparas signed the bilateral term loan agreement together with Ayala Corp. chief financial officer Jose Teodoro Limcaoco.

The oldest conglomerate, incorporated in 1968, has diversified interests including real estate and hotels, telecommunications, water infrastructure, financial services and insurance, electronics manufacturing, industrial technologies, automotive, power generation, transport infrastructure, international real estate, healthcare, education, and technology ventures.

The Ayala Group has been ramping up its investments in the country pouring in P898 billion in capital expenditures in the last six years.

For this year, it earmarked a record P249 billion for its capital expenditures primarily to finance its own investment program as well as the expansion of property giant Ayala Land, Globe Telecom, and Manila Water.

A portion of the budget was used to subscribe to the P50 billion stock rights offering of Ayala-led Bank of the Philippine Islands (BPI).

To finance the higher capital spending, Limcaoco said the group is looking at all possible opportunities, particularly in the local bond market.

Ayala Corp. announced in 2016 its target to double its net income to P50 billion by 2020 anchored on strong growth projections in its core businesses as well as its emerging businesses.

The “Ayala 2020” plan also intends to improve return on equity to 15 percent, from the current 12.1 percent expand the equity-earnings contribution of businesses outside its four largest business units to 20 percent and increase the group’s presence in Southeast Asia to 10 percent of equity earnings by 2020.

Earnings of the Ayala Group rose 11.1 percent to P7.7 billion as revenues grew 17 percent to P70.29 billion in the first quarter of the year.