First Metro Investment resources up 70%

First Metro Investment Corp. (FMIC), the investment banking subsidiary of Metropolitan Bank & Trust Co. (Metrobank), has reported a 70-percent growth in total resources from P16.8 billion in 2004 to P28.3 billion last year.

Revenues in the same year doubled to P2.77 billion, from P1.79 billion in 2004.

However, net income dropped 39 percent from a little over P1 billion to an audited or an IAS-adjusted (international accounting standards) net income after tax of P718.3 million in 2005.

Total interest income rose by more than 200 percent, reaching P1.77 billion in 2005 compared to P549.7 million in the previous year.

"Despite the turbulent economic and political climate of 2005, we are pleased to report that FMIC did much more than weather the storm. We, in fact, achieved a satisfactory 10.47- percent return on equity (ROE)," FMCI president Francisco Sebastian reported in the company’s stockholders’ meeting recently.

"Considering the significant increase in intermediation costs on long term investments, these 2005 figures must be viewed very favorably," Sebastian added.

The company’s robust performance is attributed to the continued success of its strategic business units.

First Metro Investment’s Treasury Group ended the year with a net income contribution of P469 million. Its strong distribution network allowed it to sell P6.9 billion worth, or a 15.5-percent share, of the P44.8-billion retail treasury bond (RTB) issue this year.

The company’s Investment Banking Group also continued to be a dominant player in the investment banking market, enabling the Group to clinch P108.4 billion worth of fundraising deals or 31 percent of the total industry volume of P351.3 billion in 2005.

The Group carried on its support for national development by taking the lead in government capital raising deals. It captured a 76-percent share, worth P58.7 billion of total government financing for the year.

On the private sector side, the Investment Banking Group was the arranger of the landmark P3-billion five-year loan of Ayala Corp., and was actively involved in the P1.2-billion fixed-rate loan of Ayala Corp., the P1.05-billion corporate notes Filinvest Development Corp., and the P600-million loan of Globe Telecommunications Inc..

The group also participated in the two major initial public offering (IPO) issues for the year, namely Manila Water Corp. and SM Investment Corp. (SMIC).

The Investment Advisory Group, which handles the proprietary equity portfolio of the company and manages other equity portfolios for third parties, also achieved a trading gain of P57 million on its portfolio equities, easily surpassing the P15-million trading gain in 2004.

In line with this growing competence, the company launched in October last year two mutual funds, the First Metro Save & Learn Equity Fund and Fixed Income Funds.

It’s active participation in the capital markets earned for First Metro Investment three major regional distinctions namely "Best Investment Bank" and "Best Bond House" in the Philippines from Finance Asia magazine, and "Best Domestic Investment Bank" from The Asset magazine in Hong Kong. – Ted Torres