{"id":327742,"date":"2024-05-03T01:14:00","date_gmt":"2024-05-02T17:14:00","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=327742"},"modified":"2024-05-03T02:02:02","modified_gmt":"2024-05-02T18:02:02","slug":"stock-in-focus-metrobank-mbt-3-may-2024-by-ap-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-metrobank-mbt-3-may-2024-by-ap-securities\/","title":{"rendered":"Stock in Focus: Metrobank (MBT) – 3 May 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>3 May 2024<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 78.73<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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Given the solid financials coupled with MBT\u2019s favorable capital positioning, we therefore recommend a BUY on the bank with consensus Target Price at P78.73.<\/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

MBT\u2019s bottomline for the first quarter came in-line with analysts\u2019 expectations at 25.8% of consensus forecasts. Earnings were driven mainly by the subdued growth in operating expenses coupled with the steep drop in provisioning, though this was somewhat offset by the double-digit decline in non-interest income. Overall, the numbers translated to a return on equity (ROE) of 13.7%, a 60bps improvement versus last year\u2019s levels.<\/p>\n\n\n\n

Net interest income mainly volume driven<\/h3>\n\n\n\n

Net interest income of P28.7-Billion was up by 15.4%, and we attribute this mainly to the pick-up (12.1%) in lending volumes as the loan book expanded faster than the industry\u2019s rate (9.3%). This was accompanied however by further dips in net interest margin or NIM (4.0%), with this now being the second consecutive quarterly decline coming from 3Q 2023\u2019s high of 4.05%. <\/p>\n\n\n\n

In our view, the main culprit behind this continues to be the outsized demand for time deposits which led to the CASA ratio now residing at sub-60% levels. Nevertheless, double digit improvement in net interest income was still achieved, as higher yielding consumer loans (15.3% growth)
spearheaded the loan book growth.<\/p>\n\n\n\n

Non-interest income further compresses, but countered by lower provisions<\/h3>\n\n\n\n

On the non-interest income side, the bank would see a YoY drop of 16.4% down to P6.6-Billion resulting mainly from lower trading gains and a 5.0% decline in fees. Thankfully though, this was more than made up for by the almost 80% contraction in provisioning expenses, as the bank booked only P562-Million worth of provisions for this quarter. In this regard, MBT was able to leverage its strong NPL cover (174.1% as of 1Q24) in order to ensure that the safeguards in place would remain more than adequate despite limited new provisioning for the quarter.<\/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>