{"id":323105,"date":"2023-05-09T07:13:23","date_gmt":"2023-05-08T23:13:23","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=323105"},"modified":"2023-05-09T08:13:32","modified_gmt":"2023-05-09T00:13:32","slug":"stock-in-focus-metrobank-mbt-9-may-2023-by-ap-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-metrobank-mbt-9-may-2023-by-ap-securities\/","title":{"rendered":"Stock in Focus: Metrobank (MBT) – 9 May 2023 by AP Securities"},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>MBT<\/td><\/tr>
Company Name<\/strong><\/td>Metropolitan Bank and Trust Company (Metrobank)<\/td><\/tr>
Broker<\/strong><\/td>AP Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>9 May 2023<\/td><\/tr>
Recommendation<\/strong><\/td>Hold<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 62.00<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

While Metropolitan Bank & Trust Co. (MBT)’s deposit growth of 10.8% trailed BPI\u2019s 13.6% and BDO\u2019s 14.0%, most of the growth was a result of the expansion in higher cost time deposits. In terms of loan growth, MBT came in at 12.5%, lower than BPI\u2019s 13.6% but higher than BDO\u2019s 8.0%, though it should be noted that this is despite the fact that MBT has the steepest CET1 ratio (16.80%) amongst the three. <\/p>\n\n\n\n

We would therefore recommend a HOLD on the stock given its limited upside at our Target Price, as well as its lagging performance in several metrics relative to its peers (BDO and BPI).<\/p>\n\n\n\n

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Analysis and Opinion<\/h2>\n\n\n\n

Metropolitan Bank & Trust Co. (MBT) reported to the Exchange that earnings for the first quarter of 2023 grew by 31.3% to P10.5-Billion from P8.0-Billion in the same period last year. The Q1 numbers represented 29.3% of full-year estimates in a quarter that typically contributes 27.7% of FY earnings, implying a potential 5.7% year-end outperformance. <\/p>\n\n\n\n

The bank attributed the earnings growth to a combination of the expansion of its lending portfolio, wider margins, and robust fee incomes. Gross loans rose by 12.5% year-on-year, with commercial loans growing by 12.7% while consumer loans grew by 11.8%. Gains from a larger lending portfolio was compounded by a 54bps expansion in net interest margins (NIMs) to 3.9%, while fee income rose by 13.4% to P4.1-Billion.<\/p>\n\n\n\n

While MBT\u2019s earnings for the quarter exceeded what analysts expect from the company, it lagged behind its Big Three peers (BDO and BPI) across almost all metrics. MBT\u2019s 31% net income growth trailed BPI\u2019s 52% and BDO 41%, while its 13.1% return on equity was likewise lower than BPI\u2019s 15.4% and BDO\u2019s 14.5%. <\/p>\n\n\n\n

We attribute the comparatively weaker ROE to two factors, namely its more conservative stance on provisioning, as well as its lower CASA ratio. As a percentage of PPOP (pre provision operating profit), MBT\u2019s provisions for the quarter came in at 14.9% which is the highest amongst the three. This is further seen in the bank\u2019s NPL coverage ratio which also led the way at 189.30%. Additionally, despite MBT coming in at the middle-of-the-pack in terms of NIM expansion, its absolute NIM figures still lagged the other two, a result of its significantly lower CASA ratio.<\/p>\n\n\n\n

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Check how many brokers recommend this stock<\/h2>\n\n\n\n
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All Stock Rankings<\/a><\/blockquote>