A paper on strategies for Metropolitan Bank and Trust Company

• Main Author: Sandoval, Gina P.
• Format: text
• Language: English
• Published: Animo Repository 2000
• Subjects: Banks and banking > Philippines; Metropolitan Bank and Trust Company
• Online Access: https://animorepository.dlsu.edu.ph/etd_masteral/3943
• Institution: De La Salle University

Traditionally, banks were in the business of banking , i.e., borrowing from one market and lending to another. However, their orientation has evolved into the business of financial services , with a much wider focus in relation to consumer or market needs. Metrobank has been in the banking industry for thirty-eight years. Its consolidated total resources of PHP403.85 billion and capital funds of PHP50.82 billion in 1999 made Metrobank the undisputed number one bank in the country. Unlike other local banks, Metrobank's growth is internally driven. Metrobank lives up to its vision, i.e. to be the biggest in terms of resources and the best in terms of products and services it offers to its customers. Its mission of becoming a premiere universal bank of international standing committed to help our nation meet the challenges of Philippines 2000 is the main reason why Metrobank continues its expansion plans by going regional. Metrobank employs the following major strategies: branch expansion, process re-engineering, forming of strategic alliance with respected foreign financial institutions and tapping the huge and growing consumer market. Metrobank is the leader in the local banking industry and being such doesn't mean that the bank will simply rest on its laurels. Instead, Metrobank continues to defend its position by pursuing an aggressive kind of strategy which is explained by the SPACE (Strategic Position and Actual Evaluation) Matrix. Metrobank could employ the horizontal integration strategy. It is capable of entering into a joint venture, foreign tie-up, conglomerate diversification, and market and product development among others. It means that the bank has achieved major competitive advantages in a growing and stable industry. The proposed strategy for Metrobank to adapt the horizontal integration strategy, acquisition of one of the top local banks, is very timely because of the following reasons: BSP ruling to make fewer but more stable banks, to strengthen banks' position in the industry and to curb the increasing non-performing loans. Banks offer the same kind of products. The only thing that would spell the difference is customer service. Metrobank is concerned not only in strengthening its dominance in the banking industry. It is also committed to serve the needs of the clients through product innovation and quality service delivery. It involves a personal touch in the bank's operations, putting the customers in mind in the delivery of services. Aside from the strategies which were already mentioned, this paper includes proposed strategies that would help protect Metrobank's share in the industry. These are : (1) building a brand in banking by strengthening its slogan, You're in good hands. This shows Metrobank's stability which is its selling point to its clients and (2) develop an effective promotion and advertising programs. Metrobank needs a different kind of advertising that would spell the difference from among banks the distinct feature and prominent kind of service that Metrobank offers its customers. Based on the financial projections of this paper for the years 2000-2004, the bank posts an average income growth rate of 18%. The bank could still contain its bad loans. Despite an average NPL ratio of 11.4%, the bank's average capital adequacy ratio stands at 23%. The loan to deposit ratio is increasing net interest spread is healthy. With the provision for probable losses at PHP4 billion per year, the management believes it has sufficient allowance to take care of any losses that it incurs from the non-collection or non-reliability of its receivables from customers and other risk assets.