Banking, car units drive GT Capital’s profit jump

GT CAPITAL Holdings, Inc. on Tuesday reported its core net income increased 48% to P11 billion in 2021, while consolidated income grew an even higher 68%, driven by the growth in its banking and automotive businesses.

“2021 was a strong bounce-back year for our group. Given the increased mobility and the gradual reopening of the Philippine economy in the fourth quarter, GT Capital delivered strong overall results in 2021 as we approach pre-COVID levels,” GT Capital President Carmelo L. Bautista said in a company disclosure.

Metropolitan Bank & Trust Co. (Metrobank), in which GT Capital has significant shareholdings, reported a 60% jump in net income to P22.2 billion.

In the fourth quarter of 2021, earnings more than doubled to P6 billion, the Ty-led holding firm said, citing a decline in provisions “as loan portfolio remained healthy.”

Net interest margin stabilized at 3.4% since the second quarter of 2021 as the sequential quarterly recovery in corporate and credit card loans was sustained, while the 12% increase in low-cost current account and savings account (CASA) deposits continued to help trim overall funding cost.

Robust fees and other income as well as lower operating expenses further drove the bank’s strong earnings performance, according to the disclosure.

“Despite the challenging conditions last year, Metrobank’s nonperforming loan (NPL) ratio eased to 2.2% in 2021 from 2.4% in 2020, while NPL cover remained ample at 174.7%,” GT Capital said.

“Metrobank’s positive performance in 2021 validates its strategies of fortifying the balance sheet and proactive provisioning during the pandemic. The bank has emerged stronger and well-prepared to meet the needs of its stakeholders as the economy moves towards full recovery,” said Fabian S. Dee, the bank’s president.

Meanwhile, Toyota Motor Philippines Corp. (TMP) recorded an 82% increase in net income to P6.2 billion in 2021. GT Capital is a joint venture partner in the country’s largest automotive company.

“Noteworthy is Toyota Motor Philippines, which dominated the auto market for the 20th consecutive year, realizing an all-time high market share of 46.3%, while reaching the milestone of selling over two million vehicles in the Philippines,” Mr. Bautista said.

Consolidated revenues were up 32% to P131.3 billion in 2021 from P99.8 billion in the previous year.

“Toyota outpaced the market with vehicle retail sales of 129,667 units in 2021 from 100,019 units in 2020, a 30% increase. The Philippine automotive market, on the other hand, grew by 16% to 280,338 units from 241,924 units in the previous year,” the company said.

The carmaker expanded its lineup by launching new GR Sport variants, including the Innova in February and the Camry Hybrid EV in December.

In October, Toyota surpassed the 100,000-unit sales level for its Vios model enrolled in the government’s Comprehensive Automotive Resurgence Strategy, or CARS program, making the company eligible for the production volume incentive under the scheme.

November marked the start of operations of JBA Philippines, Inc., a joint venture between Japan Bike Auction Co. Ltd. and GT Mobility Ventures that in turn is a joint venture between GT Capital Auto and Mobility Holdings, Inc. and Mitsui & Co., Ltd. (Japan). The company offers a transparent online bidding platform for pre-owned vehicles, which extends the value chain of GT Capital’s automotive business.

“As the Philippine economy rebounded in 2021, so did the automotive sector. TMP delivered strong results last year, significantly outpacing the growth momentum of the industry. We are very encouraged about our continuing strong market penetration despite four months of mobility restrictions in 2021 and the accompanying global supply chain disruptions,” GT Capital Auto and Mobility Holdings, Inc. Chairman Vince S. Socco said.

He said TMP’s market share is Toyota’s highest in the region and third-highest globally.

“As the economy and auto market resurges, TMP remains reasonably optimistic. In fact, in March this year, TMP achieved a remarkable milestone of selling over two million units in the country since it started operations over three decades ago,” Mr. Socco said.

He said the company’s main growth drivers are its wide product lineup, strong brand value, and extensive nationwide dealership network.

“Given the increased spending from the upcoming national elections and the return of banks offering auto financing, we expect to reach pre-COVID sales levels by this year. In addition, we look forward to enhancing our presence in the used car market to build a more robust mobility ecosystem,” he added.

Meanwhile, GT Capital reported stronger real estate sales from Federal Land, Inc. and higher net income contribution from associate Metro Pacific Investments Corp. (MPIC), which also contributed to the holding company’s positive performance.

Federal Land recorded a 57% increase in consolidated net income to P1 billion in 2021 from P600 million in 2020 due to continued construction activity, increased project bookings, and stronger sales activities.

The property company posted revenues of P10.4 billion in 2021, or an increase of 12% from P9.3 billion in 2020.

In February this year, Federal Land launched Aki Tower, the third residential tower of The Seasons Residences located in its planned community Grand Central Park in Bonifacio Global City.

Meanwhile, MPIC’s reported consolidated core net income was up 20% to P12.3 billion last year from P10.2 billion a year earlier. GT Capital said the “substantial improvement” was largely driven by improved traffic on its toll roads and higher volume of electricity sold by its subsidiary Manila Electric Co.

“This acceleration of growth reflected an improvement in performance notwithstanding the continued imposition of varying levels of quarantine across the country to contain the COVID-19 pandemic and was partially augmented by the impact of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law, which lowered corporate income tax rates from 30% to 25%,” it added.

Mr. Bautista said that GT Capital’s environmental, social, and governance (ESG) initiative is ranked high by rating agencies such as MSCI and S&P.

“We shall therefore continue to adapt best ESG practices moving forward. Notwithstanding the recent geopolitical conflict between Russia and Ukraine and the rise in oil and commodity prices, we look forward to 2022 with reasonable optimism as we take on new growth opportunities,” he added.

At the stock exchange on Tuesday, GT Capital shares dropped by 0.19% or P1.00 to P527 each. — Luisa Maria Jacinta C. Jocson