Metropolitan Bank & Trust Co. · PSE:MBT
Metropolitan Bank & Trust — Q2 2022 Earnings Presentation
44 slides from Metropolitan Bank & Trust's earnings presentation, July 2022
Slide 1: 2Q 2022 Earnings Call
2Q 2022 EARNINGS CALL @ Metrobank WA voure in good hands
Slide 2: Disclaimer
2022 Metropolitan Bank & Trust Company 2 This material was produced by Metrobank for information purposes only and is intended to be used in presentations by the Bank at investor meetings and does not constitute a recommendation regarding the securities of the Bank or any of its affiliates. It must
Slide 3: Macroeconomic View
MACROECONOMIC VIEW @ Metrobank M4 You're in good hands
Slide 4: Macro-economic backdrop – 1st Half 2022
Macro-economic backdrop – 1st Half 2022 GDP Inflation Policy rate 2020 2021 1Q22 2020 2021 1H22 Jun-22 2020 2021 Jul-22 -9.5% 5.7% 8.3% 2.4% 3.9% 4.4% 6.1% 2.0% 2.0% 3.25% • Increase in food and transport prices driving • Reopening driving the economic rebound inflation with June 6.1% rate the highe
Slide 5: Metrobank Economic Research Forecasts
Metrobank Economic Research Forecasts As of July 2022 2021A 2022F 2023F GDP 5.7% 6.3% 6 – 7% (2018=100) (DBCC1: 6.5-7.5%) (DBCC1: 6.5-8%) (IMF: 6.7%) (IMF: ~5%) Inflation 3.9% 5.4% ↑ 3 – 5% (2018=100) (DBCC1: 4.5-5.5%) (DBCC1: 2.5-4.5%) (BSP, 5%2) (BSP, 4.2%2) BSP RRP rate 2.0% 3.5% ↑ 4 – 5% USDPHP
Slide 6: Banking Industry: Loan recovery amid improving NPLs
Banking Industry: Loan recovery amid improving NPLs Recovery in loan growth continues, asset quality improves Deposit growth sustained amid ample market liquidity Loan growth Deposit growth CASA growth 18% 18% 17% 14% 20% 15% 15% 15% 14% 12% 9% 8% 15% 10% 8% 9% 9% 4% 6% 7% 2% 10% 14% -1.2% 5% 12% 0%
Slide 7: Financial Performance
FINANCIAL PERFORMANCE 1H 2022
Slide 8: Improving NII, better fees, stable opex, lower provisions
Improving NII, better fees, stable opex, lower provisions Net Interest Income Fees and Other Non-Interest Income Trading & FX gains Operating expenses Provisions for credit losses Taxes and NCI YoY YoY Net Income Net Income 70.0 11.7 15.6 +33% 3.9 4.4 6.0 8.0 7.6 +95% 30.0 -15% 2.3 1.1 -2% 50.0 4.0
Slide 9: Improving net interest income and NIM
Improving net interest income and NIM Interest income building up Margins on an uptrend Pbn Interest from Loans Interest expense from Deposits Pbn NII Quarterly NIM Interest from Investments Other Interest Expense Other Interest Income 4.00% 3.4% 26.0 24.0 3.4% 3.4% 3.4% 3.3% Higher accrual 3.00% 21
Slide 10: Loan growth recovering, led by corporate demand
Loan growth recovering, led by corporate demand Strong commercial demand driving loan growth Positive loan momentum sustained Pbn Consumer Corporate & Commercial MBT Gross Loans growth +9% YoY 9% 1,322 1,279 1,263 +5% QoQ 1,210 1,220 5% 1,011 996 1,049 +12% YoY 933 950 +5% QoQ -1% -4% 276 270 269 26
Slide 11: Corporate segment driving loan demand
Corporate segment driving loan demand Corporate continues to lead growth Loans by remaining maturity (Parent only) Pbn SME Corporate & Middle Market Long term Short term 1,200 +12% YoY 1,011 1,049 +5 QoQ 996 1,000 933 950 800 50% 57% 56% +25% YoY 600 +14% YoY 897 887 937 +6% QoQ 822 833 400 -0.5% Yo
Slide 12: Consumer loans driven by credit cards
Consumer loans driven by credit cards Consumer Loans Breakdown Consumer Loans By Product Pbn Others Auto Housing Credit Card* -1% YoY 276 270 269 267 273 +2% QoQ 31% 32% 34% 35% 37% 86 87 +16% YoY 92 93 100 +7% QoQ 36% 36% -6% YoY 36% 36% 35% 101 98 98 96 94 -1% QoQ 86 31% 30% 28% 28% 28% 80 76 76 7
Slide 13: Encouraging trends in big-ticket consumer loans production
Encouraging trends in big-ticket consumer loans production New car loans production accelerates New home loans on a steady uptrend +68% YoY +34% YoY New car loans New home loans 200% 150% 150% 100% 200% 179% 68% 51% 150% 50% 25% 100% 0% 34% 50% 21% -9% 3% -50% -33% 0% -49% -4% -50% -100% 1Q21 2Q21 3
Slide 14: Healthy CASA generation sustained
Healthy CASA generation sustained CASA continues to pick up CASA ratio remains elevated Pbn TDs CASA CASA TDs +13% YoY 26% 25% 24% 29% 28% 2,042 2,061 +1% QoQ 1,930 1,817 1,851 74% 75% 76% 71% 72% 2Q21 3Q21 4Q21 1Q22 2Q22 +10% YoY 1,443 1,479 +3% QoQ 1,342 1,387 1,463 CASA Deposits per Branch 1.7 1.
Slide 15: Improving margins
Improving margins Better asset yields; stable funding costs Stable to improving yields across segments 18.0% Quarterly NIM Loan yield 16.0% Asset yield Investment securities yield Funding cost Deposit cost 13.4% 13.7% 13.4% 14.0% Credit Cards 12.8% 12.8% 5.8% 5.7% 5.90% 5.5% 5.1% 5.3% 12.0% 4.90% 9.
Slide 16: Healthy non-interest income growth
Healthy non-interest income growth Robust fee income growth; solid trading income Consumer driving fee-based income Pbn Others Leasing Pbn Fee income Trust income YoY Service Fees & Trust Trading & FX gains 10.0 7.0 20.0 9.0 8.1 +12% 6.0 YoY 7.2 10.0 8.0 YoY 0.8 -3% 5.0 7.0 0.8 4.1 4.0 4.1 +18% 3.7
Slide 17: Costs kept under control
Costs kept under control Steady opex levels Improving cost-to-income ratio Pbn Others Occupancy & equipment Depreciation Taxes & licenses Manpower 25.0 65.0% 35.0 YoY 59.0% 59.0% 29.4 29.4 0% 20.0 60.0% 57.2% YoY 54.1% 53.8% 30.0 55.0% 25.0 14.7 15.1 15.0 14.9 14.6 +1% 15.0 50.0% 12.7 12.6 -1% 20.0
Slide 18: Lower provisions, ample cover maintained
Lower provisions, ample cover maintained Credit costs continue to ease Hefty provision cover Est. Credit Cost (bps) 150 160 140 120 98 196% 100 80 58 64 55 191% 60 40 20 - 179% 179% Pbn Cumulative Total Allowance Provisions for Credit 175% 70.0 14.0 60.0 50.0 48 49 48 48 49 12.0 10.0 40.0 8.0 30.0 6
Slide 19: Asset quality further improves
Asset quality further improves NPL and Past Due loans continue to taper off NPL and Past Due ratios much lower than industry Past Due ratio Industry Past Due Pbn Past Due NPL 5.4% 5.2% 4.8% 6.0% 4.6% 4.4% 5.0% 60.0 60.0 4.0% 3.0% 50.0 50.0 3.2% 3.0% 2.8% 3.0% 2.0% 2.5% 40.0 38 36 36 37 40.0 1.0% 32
Slide 20: Asset quality further improves
Asset quality further improves Restructured loans level off Combined NPLs/Restructured still below Industry NPL Ratio Ratio to Gross Loans Industry Restructured Loans Ratio Industry NPL Ratio MBT Combined NPL + Restructured Loans as Ratio to Gross Loans 4.5% 3.1% 3.1% 3.0% 4.0% 3.1% 2.9% 4.6% 3.5% 0
Slide 21: NPLs ease across segments
NPLs ease across segments Commercial NPL ratio declines... …as well as consumer NPLs NPLs NPL ratio NPL ratio Industry Consumer NPL ratio 9.9% 9.9% 16.0% 9.3% 9.0% 14.0% 12.0% 25 3.0% 1.7% 1.7% 10.0% 23 1.6% 1.6% 1.5% 2.0% 8.0% 4.8% 4.6% 4.2% 3.8% 3.3% 6.0% 21 Pbn 1.0% 4.0% 17 19 2.0% 17 0.0% 16 16
Slide 22: Consumer NPLs well below industry levels
Consumer NPLs well below industry levels Auto Home Credit Cards NPLs NPL ratio Industry NPLs NPL ratio Industry NPLs NPL ratio Industry 20 12.7% 9.4% 9.4% 12.4% 12.0% 14.0% 20 9.4% 9.6% 15.0% 11.4% 20 18 15% 12.0% 18 18 16 8.5% 14 10.0% 16 16 8.0% 6.5% 10.0% 8.0% 14 14 6.8% 10% 12 5.1% 5.0% 5.2% 12
Slide 23: Other asset quality indicators remain stable
Other asset quality indicators remain stable Real and other properties acquired (ROPA) Non-Performing Assets (NPA) Pbn Pbn ROPA Ratio to Gross Loans NPA NPA Ratio 0.8% 0.8% 0.8% 0.8% 0.8% 1.5% 1.5% 15.0 0.9% 50 1.7% 1.5% 1.4% 13.0 0.8% 45 1.3% 1.5% 0.7% 1.3% 11.0 40 0.6% 1.1% 9.0 0.5% 35 0.9% 7.0 0.
Slide 24: Healthy capital and liquidity levels provide ample support
Healthy capital and liquidity levels provide ample support Capital Ratios above minimum thresholds High Basel III Leverage Ratio, Liquidity Coverage Ratio CAR CET-1 BLR LCR 20.1% 19.3% 350% 327% 18.5% 17.6% 17.6% 16.8% 15.0% 300% 284% 249% 11.0% 250% 10.0% 9.6% 9.5% 200% Min. CET1 10.375% 150% Min.
Slide 25: Improving digital metrics on retail clients
Improving digital metrics on retail clients Digital penetration rate on a continuous upward trend, 2019 2020 2021 2022 now at 29%, with 1.3M total digital users 575K 730K 920K 1.1M 29% 28% 26% Active base steadily expanding to over 1M users – 23% 87% active rate vs 81% pre-pandemic 19% Significant i
Slide 26: Ongoing Digital Initiatives
Ongoing Digital Initiatives Wealth Manager Metrobank Operations Support Engine Wealth Insights Metrobank Online (MOSE) Online portal for high-net-worth clients Allows a client to: ✓ Metrobank’s online facility for https://wealthinsights.metrobank.ph/ ✓ View outstanding treasury investments transmiss
Slide 27: Upcoming Digital Initiatives
Upcoming Digital Initiatives New Metrobank Online App New Digital Onboarding Platform Launch by Q4 2022 for Cards & PL • Digital Servicing for our new and existing • Providing customers a seamless and customers through the new mobile app straight-through experience when they apply for a credit card
Slide 28: 2022 Outlook – Positives and Challenges
2022 Outlook – Positives and Challenges • Recovery in loans in line with economic growth • Prolonged inflationary pressures could temper business and consumer sentiment stalling recovery • Sustained NIM improvement on higher yields prospects. • Healthy fee income growth from higher transaction • Sha
Slide 29: Summary
SUMMARY Metrobank’s solid performance in 2Q is evident on all fronts: loan recovery, improving margins, healthy fee income, and stable operating costs. Asset quality continues to improve leading to lower provisions. Digitization efforts support initiatives to improve productivity and efficiency. Hig
Slide 30: Financial Summary
Financial Summary In PHP billion Balance Sheet 1H 2021 1H 2022 YoY Income Statement 1H 2021 1H 2022 YoY Total Assets 2,474 2,664 +8% Net Interest Income 37.5 39.8 +6% Loans and Receivables, Gross 1,210 1,322 +9% Total Deposits 1,817 2,061 +13% Non Interest Income 14.0 15.2 +8% CASA 1,342 1,479 +10%
Slide 31: Additional Information
ADDITIONAL INFORMATION @ Metrobank M4 You're in good hands
Slide 32: Metropolitan Bank & Trust Company (Metrobank)
Metropolitan Bank & Trust Company (Metrobank) Overview Financial Data (PHP bn) 1H22 DIVERSIFIED Total Assets 2,664 59 YEARS OF MULTI-AWARDED FINANCIAL CONGLOMERATE TRADING INFORMATION MBT PM | MBT.PS Ticker Loans and Receivables, Gross Total Deposits 1,322 2,061 SERVICE EXCELLENCE USD 4.0 Bn Market
Slide 33: Ownership and Investment Information
Ownership and Investment Information CORPORATE STRUCTURE MARKET DATA Trading information Ticker: GTCAP PM / GTCAP.PS Market cap: USD1.7 Bn Ty Family Ticker (Bloomberg | Reuters) MBT PM | MBT.PS & Other Free Related float Par value (PHP) 20.00 Parties Outstanding shares 4,497,415,555 37.2% 14.7% 48.1
Slide 34: Extensive Domestic and Overseas Coverage
Extensive Domestic and Overseas Coverage 17,000+ employee base Domestic Branch and ATM Networks Overseas Network Coverage 940+ 30+ branches Branches, subsidiaries, offices 2,300+ ATMs 140+ Remittance tie-ups 160+ Remittance agents 2022 Metropolitan Bank & Trust Company 34 This material was produced
Slide 35: Recent Awards and Recognition
Recent Awards and Recognition Most Helpful Bank in Best Local Currency Best Domestic Top Banking Bond Individuals Best Bank the Philippines; 10th in Strongest Bank Private Bank Employer Asia Pacific During #1 in Trading, in the Philippines in the Philippines #4 & #5 in Sales, in the Philippines in t
Slide 36: Meaningful Sustainability
Meaningful Sustainability GOAL 8 Decent Work and Economic Growth – Equivalent to P195 billion. Supported 206 businesses engaged in large scale retail activities, holding companies and financial institutions needing access to financial capital, hotels and restaurants, and professional and technical s
Slide 37: Sustainability: Our Progress in 2021
Sustainability: Our Progress in 2021 Formalizing the governance structure Improving our disclosures: The Board, through the Executive Committee, does the oversight and Senior Management executes the sustainability framework. Our 2021 Sustainability Report The dedicated Sustainability Department, tog
Slide 38: Special Dividend Declaration in 2022
Special Dividend Declaration in 2022 1. Tempered near-term growth prospects Demand is modest in 2022, with pre-pandemic double-digit growth possible by year 2023 onwards Key information Regular Cash • Php1.60 2. Strong NPL risk buffers already in place Dividends • Semi-annual payout per share NPL co
Slide 39: Debt Issuances
Debt Issuances Unissued 28.0 Bond Issuance 2021 0.5 PHP19.0 billion USD2 Billion 2020 42.5 PHP200* Billion Bond 100.0 Medium-Term 5.25Y Peso Notes Note Listed June 2021 Programme 2019 Programme 1.9x oversubscribed 1.5 3.60% interest rate, 35bps above 2018 19.0 benchmark rate *Note: The Board of Dire
Slide 40: Outstanding Debt Issuances & Investment Grade Credit Ratings
Outstanding Debt Issuances & Investment Grade Credit Ratings Debt Issuance Details Debt Maturity Profile (PHP Bn) Baa2 Jul-22 Stable Issue Coupon Maturity Amount • Robust capitalization, with a proven Type Date Rate Date (PHP Bn) history of support from shareholders 2022 17.50 • Strong funding and l
Slide 41: Loan Portfolio Breakdown
Loan Portfolio Breakdown MBT Loan Portfolio By Industry Philippine Banks Loan Portfolio By Industry 13% 13% 13% 14% 15% 12% 12% 12% 12% 12% 13% 10% 11% 11% 10% 11% 12% 13% 13% 13% 17% 17% 21% 21% 21% 21% 21% 18% 17% 17% Trade Manufacturing 12% 12% 9% 9% 9% 9% 9% 13% 12% 12% Real estate 7% 7% 11% 10%
Slide 42: Currency Breakdown
Currency Breakdown LOAN PORTFOLIO DEPOSITS Foreign Foreign Currency, Currency, 17% 20% Philippine Philippine Peso, 83% Peso, 80% 2022 Metropolitan Bank & Trust Company 42 This material was produced by Metrobank for information purposes only and is intended to be used in presentations by the Bank at
Slide 43: For more information, please visit our website
For more information, please visit our website: Latest Annual Reports 2021 2020 2019 Financial Reports SEC 17-A SEC 17-Q BSP SOC Investor Relations https://metrobank.com.ph/about-us/investor-relations-program Annual Corporate Governance Report For your comments and queries contact us via: https://me
Slide 44: Metrobank
<> Metrobank EAA Youre in good hands ‘THE ASIAN BANKER’ ry Best Domestic Bank BANKQUALITY.COM STRONGEST BANK Inthe Phiopited Sa Bern ws a8 IN PHILIPPINES 2021 Asiamoney Best Bank Awards 2021 Pa Ge RAE by balance sheet
Metropolitan Bank & Trust Company — Q2 2022 Earnings Presentation on 6ix