{"id":325699,"date":"2023-11-15T21:14:39","date_gmt":"2023-11-15T13:14:39","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=325699"},"modified":"2023-11-15T21:14:41","modified_gmt":"2023-11-15T13:14:41","slug":"stock-in-focus-metrobank-mbt-15-nov-2023-by-regina-capital-development-corp","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-metrobank-mbt-15-nov-2023-by-regina-capital-development-corp\/","title":{"rendered":"Stock in Focus: Metrobank (MBT) – 15 Nov 2023 by Regina Capital Development Corp."},"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>Regina Capital Development Corp.<\/td><\/tr>
Opinion Issued on<\/strong><\/td>15 Nov 2023<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 75.80<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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We are keeping our BUY rating and Target Price of P75.80\/share on MBT as the latter offers a significant upside potential of >40% from its last traded price. Downside risks to our projections are unexpected rapid asset deterioration and sluggish economic recovery.<\/p>\n\n\n\n

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

Metropolitan Bank & Trust Company (MBT) booked a 3rd quarter (3Q) 2023 Net Income (NI) of P11.07 billion, up 38.35% year-on-year (y\/y). Meanwhile, its NI attributable to equity holders of the parent company was reported to be at P10.89 billion (+38.72% y\/y) during the quarter.<\/p>\n\n\n\n

The bottomlline expansion was brought by the double-digit rise in its core business,
with Net Interest Income (NII) reaching P4.39 billion (+19.69% y\/y) and Net Interest Margin (NIM) expanding by 4bps y\/y to 4.05%. Meanwhile, MBT\u2019s flow biz improved by +62.73% y\/y to P4.93 billion mainly on the back of higher net trading, securities and forex gain, as well as higher income realized from ROPA sales. <\/p>\n\n\n\n

During the quarter loan book expanded by +7% y\/y to P1.47 trillion, comprising of 78% Corporate & Commercial loans and 22% Consumer loans. Although, the latter outpaced the formed in terms of growth. Consumers have become more comfortable to borrow amid the rise in minimum wage and decline in unemployment rate as seen in the +16% y\/y increase in consumer loans which was driven mainly by CCs and auto loans. On the other hand, Corporate & Commercial only went up by +5% y\/y to P1.14bn, as the bank extended fewer loans to SMEs.<\/p>\n\n\n\n

Despite the increase in consumer loans, MBT managed to keep its NPL at bay, with a sequential improvement of 10bps at 1.7%–way below the industry\u2019s NPL ratio of 3.5%. Nevertheless, MBT stayed firm with its conservative approach as it raised its booked provision for credit and impairment losses by +22.25% y\/y to P2.291bn, pushing its NPL cover to 187.1%–one of the highest among the local UKBs. Having more than ample NPL cover may prompt the management to consider reducing its loan loss provision in the coming quarter, which could help lift further MBT\u2019s bottomline.<\/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>