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By Likha C. Cuevas-Miel, Reporter
METROPOLITAN Bank and Trust and Company said it
would diversify its lending business, eyeing loans to projects on
biofuels, power, mining and infrastructure, which it sees as future
growth areas.
In a briefing, Vicente Cuna, Jr., Metrobank
executive vice- president for Corporate Banking, said the lender is
looking at newer areas where it can extend its business because
“we feel that the areas that we’re focusing on is nearing
saturation.”
The country’s biggest lender recently tied up
with the International Finance Corp.(IFC), a unit of the World Bank,
in extending loans to electric cooperatives in the rural areas. The
local lender said it entered into power distribution financing to
maintain market leadership and support the sector.
According to IFC, electric cooperatives in the
country need medium- to long-term financing of up to $1.3 billion
for the next 10 years to replace capital equipment about 20 to 30
years old. Cuna said Metrobank expects to finance about P1-billion
worth of projects with electric cooperatives this year. The bank is
negotiating with two cooperatives for project financing.
“The collaboration with IFC is specific to
coops. And there are potential tie-ups with IFC in the biofuels
space. We could explore that as additional area. I think for the
next two years not much [demand] but it’s just a matter of
positioning. We feel this is a growth sector but in terms of real
big-sized transactions [it would happen] in 2009,” the bank
executive said.
Besides biofuels and power, Metrobank is also
looking at infrastructure and mining project financing, some of the
“bright spots” that would fuel loan demand in the medium-term,
Fernand Antonio Tansingco, Metrobank Head of Treasury, said.
However, the lender would have to wait for signs of demand in these
areas because “other sectors are reassessing their plans” for
capital raising due to the ongoing volatility in the markets.
For this year, the bank expects its loan growth
to outpace overall economic expansion, which is seen at 6 percent.
The bulk or 70 percent of lending would be made to corporations
while the balance would be issued to consumers.
By November, Metrobank would have a maturing
Tier 2 debt issuance worth $200 million that it may refinance.
However, the bank is hardly pressed to borrow this year since its
capital adequacy ratio remains at 15 percent or well above the
regulatory minimum, Tansingco said. In addition, Metrobank has
frontloaded its capital raising last year “when cost [of
borrowing] was cheaper” through an P8.5-billion Tier 1 issuance.
This was despite a smaller requirement of $125 million, or about P5
billion for debt refinancing.
“Right now the rates are climbing higher. If
you look at subsequent Tier 2 issuance they have much smaller volume
but higher coupon. Ours is the lowest [for that tier],” the bank
treasurer said.
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