I.

UNDERSTANDING THE CLIENT’S BUSINESS AND INDUSTRY

The Client

The Metropolitan Bank and Trust Company, commonly known as Metrobank, is the
second largest bank in the Philippines. It offers various financial services, from regular
banking to insurance. It is the commercial and retail banking arm of GT Capital Holdings
Corporation.

History

 Metropolitan Bank and Trust Company (Metrobank) was established by a group

of businessmen on September 5, 1962, at the Wellington Building in Binondo,
Manila.
 In April 1997, the Central Bank authorized Metrobank to operate a foreign
currency deposit unit (FCDU).
 On August 21, 1981, the Central Bank authorized Metrobank to operate as a
universal bank.
 In September 1982, the number of Metrobank branches, offices and subsidiaries
surpassed 200.
 In 1990, alongside Chinabank, Citibank, RCBC and Security Bank, Metrobank
became a founding member of BancNet.
 On September 17, 2008, Bangko Sentral ng Pilipinas Governor Amando M.
Tetangco, Jr. announced Banco de Oro and Metrobank set aside provisions
totalling $94.7 million to cover their exposure to the Lehman Brothers' collapse
 In 2017, Metrobank made a deal with ANZ to increase its stake at Metrobank
Card Corp.

Tagline and Perspectives

 “You're in Good Hands”

Company Strategy

Metrobank employs the following major strategies: branch expansion, process re-
engineering, forming strategic alliances with respected foreign financial institutions and
tapping the huge and growing consumer market.

Possible Business Risks

Metro Bank’s problems started at the beginning of 2019, when it admitted that an
“accounting error” had caused it to understate the risk of a significant proportion of its
mortgage loans and hence overstate its capital.
 Regulatory Bodies

 Bangko Sentral ng Pilipinas

 General Banking Law
 Manual Regulations for Banks issued by the BSP
 New Central Bank Act
 Charter of the Philippine Deposit Insurance Corporation (PDIC)

SIGNIFICANT ACCOUNTING POLICIES

Basis of Preparation

The accompanying unaudited interim condensed consolidated financial

statements have been prepared in accordance with Philippine Accounting
Standard (PAS) 34, Interim Financial Reporting.

Statement of Compliance

The unaudited interim condensed consolidated financial statements have been

prepared in compliance with the Philippine Financial Reporting Standards (PFRS).

Presentation of Financial Statements

Financial assets and financial liabilities are offset and the net amount reported in the
statement of financial position only when there is a legally enforceable right to offset the
recognized amounts and there is an intention to settle on a net basis, or to realize the
assets and settle the liability simultaneously.