Dear fellow shareholders,

In the past three years since the COVID-19 pandemic, the world has faced multiple new economic, social, and geopolitical challenges.

In 2023, just when global economies were ready for post-pandemic recovery, geopolitical tensions worsened with the continuing conflict between Russia and Ukraine, and the outbreak of the Israel-Hamas war. As a consequence, global supply chains were disrupted anew. Commodity prices remained elevated, thus nudging central banks into raising interest rates.

Amidst this volatile landscape, the Philippines still emerged as one of the fastest-growing economies among major Asian countries in 2023. Our GDP grew by 5.5% in 2023, albeit tempered by high prices, high borrowing costs, and sluggish public spending. As monetary policy around the world remained hawkish, the Bangko Sentral ng Pilipinas (BSP) further hiked its key policy rate by a total of 100 basis points to 6.5% to keep inflation in check.

Beyond geopolitics, the threat of climate change persists. In 2023, global temperatures reached the highest in recorded human history. Extreme weather disturbances continued to adversely affect local communities and ecosystems around the world, contributing to the scarcity of vital resources on which our economies rely. In the Philippines, the impact may be even greater. Due to our geographical location, our country is considered among the most vulnerable to climate change. Our economy is also heavily dependent on imported rice, our staple food. So, among the economic headwinds we have to brave, the El Niño weather phenomenon may be one of the most impactful.

THE OPPORTUNITY FOR US

While the challenges seem enormous, we also see plenty of opportunities on the horizon. One of these is the evolving role we must play as a bank.

Banks must also enable communities to not just survive but also thrive, in addition to performing their fiduciary responsibility of taking care of people’s money.

Metrobank has been doing just that. As a catalyst, we can help bridge the gap between individuals and communities who have access to financial resources and those who do not. By making financial services accessible and affordable, promoting financial literacy, and supporting economic growth, we aid in creating a sustainable and inclusive economy.

In 2023, PHP30.4 billion in loans were extended to the MSME sector that comprises 99.5% of the total number of business establishments, employs 63.0% of the labor force, and accounts for 40.0% of the country’s Gross Domestic Product. Through our various tailored loan programs, our MSME clients are able to finance their capital requirements, purchase equipment and inventory, acquire franchises, finance renovations, improve food production, storage, and distribution, and efficiently expand operations. We have likewise remained true to our commitment to nation building by financing key industries that drive economic growth. In 2023, PHP173.7 billion in outstanding loans were in support of private infrastructure, sustainable urbanization, and safe and affordable housing. Financing the development of roads and highways, and information technology and telecommunications infrastructure reached PHP228.7 billion during the same year, while nearly PHP175.0 billion were to reinforce power generation, transmission, distribution, and other energy sector activities. These loans directly support our focus SDGs: Goal 1 (No Poverty), Goal 2 (Zero Hunger), Goal 8 (Decent Work and Economic Growth), Goal 9 (Industry, Innovation, and Infrastructure), and Goal 10 (Reduced Inequalities).

We likewise see opportunities for financial inclusivity as we expand the reach of our branch network, even to those in remote areas that remain unbanked. Over 50.0% of our domestic branches are in the countryside, bringing our services closer to more Filipinos. We also continue to respond to the needs of overseas Filipinos, as our international network facilitated more than USD10.0 billion in remittances in 2023 – a 29.0% increase from previous year. As we aspire to further expand our reach to more Filipinos, we have revamped our digital banking platforms and continued our Cash PickUp feature to enable our clients to send money anywhere in the Philippines through over 10,200 remittance partner outlets. On the digital front, we achieved our highest digital penetration rate of 37.0% in 2023. We hope to further increase this level as we aim to provide the tools and resources to digitally enable individuals, businesses, and communities who have historically been underserved by traditional financial services.

Leveraging on the collective strength of our subsidiaries and our incredible partnerships, we continue to empower the public we serve by sharing our expertise to a wide scope of customers and stakeholders, enabling them to protect their hard-earned savings and grow their investments. We continue to upgrade our financial education channels that cater to every life stage of our customers, starting with the Earnest, our platform for first time investors, to Wealth Insights, our online portal for high-net worth clients. Our investment banking arm, First Metro Investment Corporation, and subsidiaries First Metro Securities Brokerage Corp, and First Metro Asset Management Inc. mobilized over 500 financial education-related events in 2023, reaching an audience of over 86,000 tackling various topics from macroeconomy, capital markets to budgeting, financial security, debt management, and retirement planning.

DOING WELL BY DOING GOOD

We do well by the public we serve by doing good. We amplify our business impact through the Metrobank Foundation, our corporate social responsibility arm, and the activities of our 100% employee volunteers from the Purple Hearts Club. For 45 years now, the Foundation has been empowering Filipinos through the recognition of outstanding public service, educational scholarships, livelihood opportunities, and programs that enable communities to be resilient against disasters, health crises, and other vulnerabilities. Through the work of our Foundation, we are giving the majority of Filipinos a fighting chance to break free from the cycle of poverty. In 2023 alone, we reached more than 3 million beneficiaries through our health, education, arts, livelihood, and special intervention programs.

We further live up to this commitment by embracing our sustainability principles and walking the talk. We do this by continuing to fine-tune our risk management processes as we support responsible wealth generation without compromising the welfare of future generations. This purpose guides our long-term aspirations. Through the active participation of our employees, our subsidiaries, and the Foundation, the embedding of responsible practices shall be continued and further enhanced as we recognize that Metrobank’s achievements are not solely measured financially, but more so by the positive impact we create in the communities we serve.

THE FUTURE AHEAD

We are hopeful for a better 2024, as the economy remains supported by resilient consumption and investment spending. Backed by a formidable balance sheet, strong liquidity and capital structure, Metrobank stands ready to support the financial needs of our customers.

All our goals and achievements come to life, thanks to our talented employees whom we always regard as our partners in enabling the communities we serve. We are committed to our employees’ continued growth through developmental opportunities to expand their capabilities and skills, so they can ultimately serve our clients and communities better.

For more than six decades now, we have established deeply-rooted relationships in our local communities, particularly in the middle market and in the commercial lending segments. Many of these relationships have now spanned almost half a century, and started when Metrobank first opened a branch in Divisoria. These enduring relationships brought us to where we are, and gave us the confidence to fulfill our promise to our clients – “You’re in Good Hands” with Metrobank.

We in the Board hear stories about the clients we serve, and how Metrobank is able to work with them through the toughest situations to help them regain control of their lives or achieve their dreams. These stories are a wonderful reminder of why Metrobank exists, and how we can magnify our role in enabling communities to thrive.

I am deeply grateful to you, our shareholders, employees, customers, and partners, for putting your faith in Metrobank. We will continue to look to you as collaborators, as we endeavor to ensure that our success redounds to the benefit of communities and, ultimately, our society.

Arthur Ty Chairman

Dear fellow shareholders,

On many counts, 2023 remained a challenging year for many around the world. The year was marked by increasingly complex crises — geopolitical tensions that continued to cause supply chain disruptions, rising inflationary pressures, escalating climate change that led to the hottest temperature on record; and the resulting uneven and uncertain global economic outlook.

BREAKING RECORDS

Amidst this backdrop, we managed to improve our operating performance, and even break records.

Thanks to asset expansion, margin growth, improved efficiency levels, and better asset quality, our net income reached a record PHP42.2 billion in 2023, 28.9% higher than in 2022. This translated to a return on equity of 12.5% from 10.3% recorded in 2022.

Our total assets grew by 9.2% to PHP3.1 trillion with gross loans up by 7.6%. High single-digit loan growth led to a 22.7% increase in net interest income and net interest margin of 3.9%. Fee-based income rose by 9.0% to P16.4 billion while trading and foreign exchange gains were flat at PHP4.0 billion.

Despite the expansion in our loan portfolio, we were able to continue improving our asset quality, with our non-performing loans ratio falling to 1.7% from 1.9% in 2022. Our NPL cover remained substantial at 180.3%.

Total deposits jumped 7.3% to PHP2.4 trillion, of which 60.4% came from low-cost current and savings accounts deposits. Our cost-to-income ratio stood at 52.1%, an improvement from 54.3% in 2022.

After achieving historically high earnings and with our common equity tier 1 (CET1) ratio still formidable at 17.4%, our Board of Directors approved to pay record dividends of PHP22.5 billion to our stockholders. This is equivalent to a total cash dividend of PHP5.0 per common share, the highest in our history.

With our solid foundation, we have been able to sustain our growth trajectory. As such, our efforts were again recognized by top financial publications. Metrobank received back-to-back awards from The Banker as the country’s “Bank of the Year,” the Asian Banker’s

“Strongest Bank in the Philippines” for the third year and Asiamoney’s “Best Domestic Private Bank.”

DRIVING OUR GROWTH FURTHER

We continued to rely on the robust performance of our Metrobank Group subsidiaries and affiliates in 2023.

For the second year in a row, Philippine Savings Bank (PSBank), our thrift bank arm, posted another all-time-high net income of PHP4.5 billion for full-year 2023, up 23.1% from PHP3.7 billion in 2022. This translates to a return on equity of 11.7%.

The bank’s strong financial performance came from the double-digit growth in loans, higher investment revenues and muted costs brought by operational efficiencies. Net interest income improved to PHP11.8 billion, increasing by 7.1% year-on-year, while operating expenses growth was flat due to continuous cost optimization efforts of the bank. It had total assets of PHP238.4 billion while total deposits reached PHP189.6 billion.

Demonstrating resilience, First Metro Investment Corporation (First Metro), our investment banking subsidiary, participated in 78% of the capital-raising deals during 2023.

In 2023, AXA Philippines (AXA), our insurance arm, changed its corporation name to “AXA Philippines Life and General Insurance Corporation,” capturing the full scope of its services which covers both life and non-life insurance offerings to its nearly two million customers. The Company launched AXA MyLifeChoice, which offered all-around coverage for income protection, health, and investments. It also combined life with asset protection with its Global REIT and Property Income Fund via Asset Master. This allowed local investors to tap into diverse global real estate sectors, including the new powerhouses of the real estate industry.

ORIX METRO Leasing and Finance Corporation (ORIX METRO) posted a net income of PHP463.0 million, a remarkable 96.8% increase from the previous year’s PHP235.2 million. This was after a significant enhancement in its portfolio quality. Its NPL cover is now at a comfortable 137.5% level, demonstrating its resilience and commitment to navigating challenges.

OUR EVER-EVOLVING ROLE

Behind each of these numbers are real-world needs being met: the value we continue to bring to individual customers, businesses, and local communities.

As the country’s second largest privately owned universal bank, Metrobank is a significant player in mobilizing and deploying capital for development. In 2023 alone, we have generated nearly PHP155.5 billion in economic value, including loans to fund the country’s growing infrastructure demand and stimulate trade and other business operations, including those of small and medium enterprises (SMEs). Through our corporate social responsibility arm, the Metrobank Foundation, and our employee volunteer-powered Purple Hearts Club, we were able to magnify our business impact with more than PHP112.4 million in community investments and donations to communities’ health, education, livelihood, and disaster relief programs.

Through our network of branches, our digital channels, as well as those of our subsidiaries and corporate social responsibility arms, we are able to reach out to more Filipinos here and abroad, including those we aim to bring into the financial ecosystem.

In the Philippines, nearly a quarter of the 114 million population are poor. Thus, the role of banks in empowering individuals and communities through financial solutions has never been more critical.

With the increasing vulnerability of people and communities to the world’s complex problems, Metrobank has to play its part, and play its part well.

While we pursue our long-term strategy and goals as an enterprise, we have been mindful that our role goes beyond being a financial intermediary. We help realize the hopes and dreams of our customers, but not those that come at the expense of our planet and the future generations who will inherit it. In the coming years, we have our work cut out for us to enable our communities to overcome the odds, bounce back stronger, and thrive. There is so much that we can do. But we cannot take on the world’s problems alone.

We need the trust and confidence of our clients, the talent and dedication of our employees, and the leadership of our Board of Directors and senior management team to hold the torch so we can clearly see and stay the course.

Together, you have put your good hands in Metrobank, and we thank you.

Fabian Dee President