Metropolitan Bank & Trust Co. · PSE:MBT
Metropolitan Bank & Trust — Q1 2023 Earnings Presentation
44 slides from Metropolitan Bank & Trust's earnings presentation, May 8, 2023
Slide 1: Company Presentation
COMPANY PRESENTATION @ Metrobank A voure in good hands
Slide 2: 2023 Metropolitan Bank & Trust Company This material was produced by Metrobank for information
2023 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 aa You're in good hands
Slide 4: Macro-economic backdrop
Macro-economic backdrop Inflation Policy rate GDP 2020 2021 2022 4M23 Apr-23 2020 2021 2022 Mar-23 2020 2021 2022 2.4% 3.9% 5.8% 7.9% 6.6% 2.0% 2.0% 5.5% 6.25% -9.5% 5.7% 7.6% • 2022 GDP back to pre-pandemic levels; growth • Slowed down to 6.6% from 7.6% in Mar-23, • Inflationary pressures prompt BS
Slide 5: Metrobank Economic Research Forecasts
Metrobank Economic Research Forecasts As of May 5, 2023 2021A 2022A 2023F 2024F GDP 5.7% 7.6% 6 – 7% 6 – 7% (2018=100) (DBCC1: 6.0-7.0%) (DBCC1: 6.5-8.0%) (IMF: 6%) (IMF: 5.8%) Inflation 3.9% 5.8% 6.0% 4.5 – 5.5% (2018=100) (DBCC1: 5.0-7.0%) (DBCC1: 2.0-4.0%) (BSP, 6.0%2) (BSP, 2.92) BSP RRP rate 2.
Slide 6: Banking Industry: Loan recovery sustained, slight pick-up in NPL ratio
Banking Industry: Loan recovery sustained, slight pick-up in NPL ratio Continued loan growth recovery, NPL ratio inches up Easing deposit and CASA growth Loan growth Deposit growth CASA growth 17% 18% 14% 18% 20% 15% 15% 15% 14% 9% 9% 11% 11% 11% 12% 6% 15% 10% 8% 9% 9% 7% 9% 2% 4% 10% 7% 8% -1.2% 5
Slide 7: Financial Performance 1Q 2023
FINANCIAL PERFORMANCE 1Q 2023
Slide 8: Strong NII, steady fees mitigate rising opex
Strong NII, steady fees mitigate rising opex Net Interest Income Fees and Other Non-Interest Income Trading & FX gains Operating expenses Provisions for credit losses Taxes and NCI YoY Net Income 7.8 3.9 4.4 6.0 8.0 7.6 7.8 9.3 10.5 +31% Pbn 35.0 1.5 2.1 -8% 2.3 1.1 5.9 6.0 Flat 25.0 2.9 1.2 0.3 1.0
Slide 9: Expanding assets and rising margins boost NII
Expanding assets and rising margins boost NII Interest income building up Margins still on an uptrend Pbn Interest from Loans Interest expense from Deposits Pbn NII Quarterly NIM Interest from Investments Other Interest Expense Other Interest Income 38.0 3.86% 4.00% 27.0 3.65% 3.73% 33.0 Higher accr
Slide 10: Loan book driven by both corporate and consumer segments
Loan book driven by both corporate and consumer segments Strong commercial demand driving loan growth Positive loan momentum sustained Pbn Consumer Corporate & Commercial MBT Gross Loans growth +12% YoY 1,457 1,421 1,372 -2% QoQ 1,322 14% 1,263 12% 12% 9% 5% +13% YoY 1,164 1,122 1,049 1,092 -4% QoQ
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 1,400 1,164 +13% YoY 1,200 1,092 1,122 -4% QoQ 1,049 996 1,000 54% 56% 53% 58% 800 60% +22% YoY +14% YoY 1,046 1,011 600 937 981 -
Slide 12: Consumer loans driven by credit cards and auto recovery
Consumer loans driven by credit cards and auto recovery Consumer Loans Breakdown Consumer Loans By Product Pbn Others Auto Housing Credit Card & Others* 350 299 +12% YoY 292 300 280 +2% QoQ 267 273 35% 37% 38% 40% 40% +28% YoY 250 116 120 93 100 107 +3% QoQ 200 36% 35% 33% 150 -4% YoY 32% 31% 96 94
Slide 13: Sustained growth in big-ticket consumer loans production
Sustained growth in big-ticket consumer loans production New car loans production accelerates New home loans on an uptrend +42% YoY +11% YoY New car loans New home loans 200% 150% 150% 105% 230% 179% 100% 68% 70% 51% 42% 180% 50% 25% 130% 42% 80% 34% 0% 21% 25% 11% -9% 30% 3% -50% -49% -20% -33% -4%
Slide 14: CASA ratio eases to pre-pandemic level
CASA ratio eases to pre-pandemic level Total deposits continue to pick up CASA ratio eases Pbn TDs CASA CASA TDs 29% 28% 29% 33% 38% 2,500 +11% YoY 2,221 2,263 +2% QoQ 2,061 2,049 71% 72% 71% 67% 62% 2,042 2,000 1Q22 2Q22 3Q22 4Q22 1Q23 1,406 -3% YoY 1,500 1,480 -5% QoQ Steady CASA Deposits per Bran
Slide 15: Sustained margin improvement
Sustained margin improvement Better asset yields offsetting uptick in funding costs Stable to improving yields across segments 18.0% Quarterly NIM Loan yield Asset yield Investment securities yield 16.0% 14.3% 14.3% 14.1% 14.3% Funding cost Deposit cost 13.5% 14.0% 7.5% Credit Cards 6.7% 6.5% 6.2% 1
Slide 16: Rising fee income driving non-interest income growth
Rising fee income driving non-interest income growth Fees drive non-interest income Healthy fee income Pbn Others Asset sales Pbn Fee income Trust income Leasing Service Fees & Trust 7.0 Trading & FX gains YoY 6.0 +10% YoY 5.0 4.1 4.2 4.3 4.4 4.0 -21% 10.0 0.4 0.4 0.3 4.0 0.4 0.4 9.0 8.3 8.1 -2% 3.0
Slide 17: CIR improves despite rising opex
CIR improves despite rising opex Rising opex on the back of increased transactions Improving cost-to-income ratio Pbn Others Occupancy & equipment Depreciation Taxes & licenses 25.0 Manpower 60.0% YoY 55.0% 54.1% 53.8% 54.5% 54.3% 20.0 51.6% 16.9 +14% 16.5 50.0% 14.9 14.6 15.1 15.0 45.0% +7% 6.7 7.1
Slide 18: Credit costs remains steady; ample NPL cover
Credit costs remains steady; ample NPL cover Temporary pick up in credit costs Hefty provision cover Est. Credit Cost (bps) 350 293 350 300 300 250 250 200 200 150 70 92 150 64 55 56 68 67 59 100 196% 100 50 50 189% - - 179% Pbn 172% 172% Cumulative Total Allowance Provisions for Credit 60.0 60.0 50
Slide 19: Improving asset quality
Improving asset quality NPL and Past Due loans NPL and Past Due ratios much lower than industry Past Due ratio Industry Past Due Pbn Past Due NPL 4.8% 6.0% 4.2% 4.0% 4.0% 5.0% 60.0 3.8% 4.0% 50.0 3.0% 50.0 3.0% 2.0% 37 2.5% 2.5% 2.2% 2.3% 35 40.0 33 1.0% 32 32 40.0 0.0% 30.0 30.0 1Q22 2Q22 3Q22 4Q22
Slide 20: Asset quality still better than industry
Asset quality still better than industry Restructured loans level off Combined NPLs/Restructured still below Industry NPL Ratio Ratio to Gross Loans Industry Restructured Loans Ratio Industry NPL Ratio 3.0% MBT Combined NPL + Restructured Loans as Ratio to Gross Loans 4.0% 2.9% 2.8% 3.5% 2.6% 2.6% 8
Slide 21: Improving NPL trend
Improving NPL trend Commercial NPLs Consumer NPLs NPLs NPL ratio NPL ratio Industry Consumer NPL ratio 14.0% 9.0% 8.1% 12.0% 7.2% 6.5% 35 1.7% 1.5% 1.9% 1.7% 1.6% 10.0% 8.0% 3.8% 0.0% 30 6.0% 3.3% 2.8% 2.8% 2.8% Pbn 4.0% 25 2.0% 21 20 -5.0% 0.0% 25 20 17 18 16 20 Pbn -10.0% 15 15 10 9 8 8 8 10 10 -1
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 14.0% 20 9.4% 15.0% 11.4% 8.6% 20 18 10.6% 15% 7.9% 12.0% 18 18 7.5% 16 9.3% 14 8.4% 10.0% 16 16 6.5% 10.0% 5.8% 10% 14 14 5.0% 8.0% 3.9% 12 12 12 4.4% 6.0% 4.7%
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 ROPA Ratio to Gross Loans Pbn NPA NPA Ratio 15.0 0.8% 0.8% 0.9% 50 2.0% 0.8% 0.7% 0.7% 1.4% 1.3% 1.4% 1.3% 13.0 0.8% 45 1.2% 1.5% 0.7% 1.0% 11.0 40 0.6% 0.5% 9.0 0.5% 35 0.0% 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 18.5% 17.6% 21.00% 21.0% 17.2% 17.7% 17.6% 17.6% 16.8% 350% 16.3% 16.8% 16.8% 15.0% 17.5% 17.50% 300% 284% 249% 232% 245% 238%
Slide 25: Improving digital metrics on retail clients
Improving digital metrics on retail clients 2019 2020 2021 2022 1Q 2023 Digital penetration rate on a continuous upward trend, now at 36%, with 1.6M total digital users 575K 730K 920K 1.3M 1.4M 36% 32% 31% Active base with over 1M users: 90% active rate 29% vs 81% pre-pandemic 28% 26% 23% Continuous
Slide 26: Outlook – Positives and Challenges
Outlook – Positives and Challenges • Resilient domestic economy to support loan • Macro risks to demand recovery and asset quality: expansion o External - geopolitical issues; recession; global financial instabilities • Stable margins o Internal - inflationary pressures, forex volatility • Improving
Slide 27: Summary
SUMMARY Sustained solid performance on robust topline growth supported by rising loans, better margins and healthy fee income. Improving profitability levels will support continued investments in IT and manpower assets to make banking easy and secure for our customers. Strong capital base and high l
Slide 28: Financial Summary
Financial Summary In PHP billion Balance Sheet 1Q 2022 1Q 2023 YoY Income Statement 1Q 2022 1Q 2023 YoY FY 2021 FY 2022 YoY Total Assets 2,644 2,879 +9% Net Interest Income 19.3 24.9 +29% 75.0 85.5 +14% Loans and Receivables, 1,263 1,421 +12% Gross Non Interest Income 8.3 8.1 -2% 26.4 27.5 +4% Total
Slide 29: Additional Information
ADDITIONAL INFORMATION > Metrobank aa You're in good hands
Slide 30: Metropolitan Bank & Trust Company (Metrobank)
Metropolitan Bank & Trust Company (Metrobank) Overview Financial Data (PHP bn) 1Q 2023 DIVERSIFIED Total Assets 2,879 60 YEARS OF MULTI-AWARDED FINANCIAL CONGLOMERATE TRADING INFORMATION MBT PM | MBT.PS Ticker Loans and Receivables, Gross Total Deposits 1,421 2,263 SERVICE EXCELLENCE USD 4.9 Bn Mark
Slide 31: Ownership and Investment Information
Ownership and Investment Information CORPORATE STRUCTURE MARKET DATA Trading information Ticker: GTCAP PM / GTCAP.PS Market cap: USD1.9 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% 48.0
Slide 32: Extensive Domestic and Overseas Coverage
Extensive Domestic and Overseas Coverage Total Group 17,000+ employee base Domestic Branch and ATM Networks Overseas Network Coverage 947 30+ branches Branches, subsidiaries, offices 2,316 ATMs 120+ Remittance tie-ups 150+ Remittance agents 2023 Metropolitan Bank & Trust Company 32 This material was
Slide 33: Key Objectives and Strategies
Key Objectives and Strategies Financial Growth Attract And Increase Retain The Customer Best People Base Strengthen Improve Control Customer Framework Satisfaction Increase Widen Digital Operational Banking Efficiency Capabilities 2023 Metropolitan Bank & Trust Company 33 This material was produced
Slide 34: Recent Awards and Recognition
Recent Awards and Recognition Best Domestic Best Top Banking Bank of the Year Strongest Bank Best Bank Private Bank Corporate Bank Employer in the Philippines in the Philippines in the Philippines in the Philippines in the Philippines in the Philippines 2023, 2022 2022 2022, 2021 2022 2022 2022 Best
Slide 35: Special dividend declaration in 2023
Special dividend declaration in 2023 1. Improving growth prospects Sufficient buffer to cover healthy loan demand over the medium term Key information Regular Cash • Php1.60 2. Strong NPL risk buffers already in place Dividends • Semi-annual payout per share NPL cover remains ample vs. risk of risin
Slide 36: Sustainability Journey: Our Progress in 2022
Sustainability Journey: Our Progress in 2022 Enhancing the ESRM Framework We Weare guided are guided by ourby E&Sour E&S Risk Risk Appetite Appetite Statement (RAS) Statement (RAS) We have low tolerance for E&S risks that adversely affect the business, and are committed to mitigating the negative im
Slide 37: Sustainability Journey: Our Progress in 2022
Sustainability Journey: Our Progress in 2022 Improving our disclosures: Our 2022 Sustainability Report Moving Forward We disclose the Bank’s contributions to all 17 United Nations Sustainable Development Goals We will support the Philippine Development Plan (UN SDG) in addition to our Sustainability
Slide 38: Sustainability Journey: Our Progress in 2022
Sustainability Journey: Our Progress in 2022 Philippine Development Plan Headline Socioeconomic Targets Build resilient infrastructure, promote Transform the production sectors through innovation. The Philippines inclusive and sustainable industrialization aims to continue its progress among the inn
Slide 39: Debt Issuances
Debt Issuances Unissued 2022 28.0 0.5 Bond Issuance 2021 76.3 USD2 Billion PHP23.7 billion PHP200* Medium-Term 42.5 Billion Bond 1.5Y Peso Notes 2020 Programme Note Programme Listed October 2022 2019 1.5 5.0% interest rate p.a. 19.0 23.7 2018 *Note: The Board of Directors of Metrobank approved to up
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 2023 22.40 • Strong funding and l
Slide 41: Loan Portfolio Breakdown
Loan Portfolio Breakdown MBT Loan Portfolio By Industry Philippine Banks Loan Portfolio By Industry 14% 15% 14% 15% 16% 12% 12% 12% 12% 12% 10% 11% 11% 11% 10% 13% 13% 13% 13% 12% 21% 21% 20% 20% 20% 17% 17% 16% 15% 14% Trade Manufacturing 9% 12% 9% 9% 9% 9% 12% 12% 13% 12% Real estate 7% 10% 10% 10
Slide 42: Currency Breakdown
Currency Breakdown LOAN PORTFOLIO DEPOSITS Foreign Foreign Currency, Currency, 19% 14% Philippine Peso, 86% Philippine Peso, 81% 2023 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 2022 2021 2020 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 awards
<< Metrobank EAA Vourre in good hands - THEASUORANKER FUROMONE! rs Bare (nl STRONGEST BANKS 2022 AWARDS FOR EXCELLENCE vos THE 2022 =a THE ASIAN BANKER para eS = | STRONGEST BANK IN PHILIPPINES 2021 by balance sheet
Metropolitan Bank & Trust Company — Q1 2023 Earnings Presentation on 6ix