Metrobank set to buy out ANZ’s stake in credit card joint venture

METROPOLITAN BANK & Trust Co. (Metrobank) is set to buy out a minority shareholder in a credit card joint venture for P14.8 billion, which will give it full ownership of the firm.

In a disclosure to the Philippine Stock Exchange on Thursday, Metrobank said it entered into an agreement with ANZ Funds Pty. Ltd. ( ANZ) for the bank’s purchase of the latter’s 40% stake in credit card provider Metrobank Card Corp. (MCC).

MCC is a joint venture between Metrobank and ANZ formed in 2003, with the local lender holding the majority 60% stake. In 2016, MCC reported total assets of P60.4 billion and a return on average equity of 36.3%.

“MCC is the leading provider of credit cards in the Philippines with more than 1.5 million cards in force based on data obtained from the Credit Card Association of the Philippines (CCAP),” Metrobank said in a statement.

The bank said subject to regulatory approvals, Metrobank will initially buy 20% of MCC for P7.4 billion. The purchase of the remaining 20% will be made on the same terms and is expected to be completed by the third quarter of 2018.

“The joint venture arrangement has created a lot of value for both partners as we transformed MCC into the # 1 credit card company in the Philippines. We expect that the historically strong performance of MCC can be sustained on the back of robust consumption spending,” Metrobank President Fabian S. Dee was quoted as saying in the statement.

“With this transaction, we now have a great opportunity to further expand our retail capabilities. We expect to leverage on better operational efficiencies as we eventually make MCC a wholly owned subsidiary of Metrobank,” Mr. Dee added.

Metrobank said the transaction will allow the lender to “recognize additional earnings from MCC” and “improve operational efficiencies between MCC and Metrobank.”

Metrobank Vice- President and Head of Investor Relations Joey T. Mapa said the sale was “a mutual agreement.”

“We feel we are in a position to manage it on our own as it eventually becomes a 100% subsidiary,” Mr. Mapa told AFP.

For his part, ANZ Deputy Chief Executive Officer Graham Hodges said in a separate statement: “This has been a highly successful joint venture for both ANZ and Metrobank creating the leading credit card company in the Philippines. The sale makes sense for ANZ given our continued efforts to simplify our business and is also a good outcome for MCC and its card customers given the strength of the business.”

“ANZ remains committed to its institutional business in the Philippines,” Mr. Hodges added.

Metrobank booked an unaudited consolidated net income of P3.934 billion in the second quarter, up 3.25% from P3.81 billion in the same period last year.

For the first semester, it earned P9.496 billion, up 4.79% from P9.062 billion during the comparable period in 2016. Total loans jumped by 21% to hit P1.1 trillion, supported by a 24% increase in corporate lending and a 17% rise in consumer credit, largely driven by car loans.

Shares in Metrobank closed at P92 apiece on Thursday, gaining P2.30 centavos or 2.56% from the P89.7 finish in the previous day. • E.J.C. Tubayan with AFP