{"id":326976,"date":"2024-02-29T10:04:44","date_gmt":"2024-02-29T02:04:44","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=326976"},"modified":"2024-02-29T11:07:57","modified_gmt":"2024-02-29T03:07:57","slug":"stock-in-focus-metrobank-mbt-29-feb-2024-by-ap-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-metrobank-mbt-29-feb-2024-by-ap-securities\/","title":{"rendered":"Stock in Focus: Metrobank (MBT) – 29 Feb 2024 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>29 Feb 2024<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 70.68<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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While we previously griped about MBT\u2019s lack of aggressiveness as well as its capital allocation practices and lagging ROE, we nevertheless note the improvement in the bank\u2019s dividend policy. Management has raised dividends per share from P1.60 to P3.00 (semi-annual basis), while also declaring special dividends of P2.00. This would take the total annual dividend yield of the bank to 8.3%. On account of the strong dividend returns, we therefore recommend a BUY on MBT based on consensus Target Price of P70.68.<\/p>\n\n\n\n

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

Earnings match expectations<\/h3>\n\n\n\n

2023 profits were at par with analysts\u2019 forecasts, accounting for 99.8% of projected figures. While bottomline figures were generally stronger on a YoY basis, we note that a sequential dip in the final quarter\u2019s net income held the bank back from fully outperforming.<\/p>\n\n\n\n

NIMs improve, repricing may still be underway<\/h3>\n\n\n\n

Net interest income for the year grew by 22.7% to P104.97-Billion, as the high
interest rate environment and faster repricing of loans vis-\u00e0-vis deposits led to net interest margin (NIM) expansion of 34bps (now at 3.90%). We note that trends indicate some further repricing upside down the line given that interest income growth continued to outpace the increase in interest expenses.<\/p>\n\n\n\n

Provisioning and OPEX mostly tempered <\/h3>\n\n\n\n

Further supplementing the bank\u2019s earnings performance was the subdued movement in provisioning during Q4. While total provisions for the year still landed at P8.98-Billion, we note that Q4 provisions of P2.18-Billion were down both year-on-year (-9.7%) and versus the prior quarter (-4.8%), further validating our expectations for minimal provisioning growth in the industry for 4Q 2023. With regard to its operating costs, full year cost-to-income came in at 52.1%, an improvement of 220bps.<\/p>\n\n\n\n

Non-interest income lags<\/h3>\n\n\n\n

Figures for the bank\u2019s non-interest income however, left much to be desired particularly in Q4. YoY growth lay at only the mid-single digits (6.4%) to come in at P28.50-Billion. This was drastically weaker during the final quarter however, as Q4 figures of only P5.55-Billion were weaker YoY (-0.3%) and QoQ (-30.8%). This was the main factor behind the sequential decline in quarterly profits that was seen during Q4.<\/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>